Market Update for the Week of July 30, 2018

INFO THAT HITS US WHERE WE LIVE

Disappointing to see existing home sales decline in June for the third month in a row, but the market could be close to turning back up, as inventory rose from the year before for the first time in three years.

That’s important because the challenge with existing home sales has been supply. Demand remains strong, as 58% of existing homes sold in June were on the market less than a month.

New Home Sales also dipped in June, but they’re still up 2.4% from a year ago, inventory is the highest in nine years, and sales the first six months of 2018 are up 6.4% over the same period a year ago. So the housing recovery continues.

BUSINESS TIP OF THE WEEK

To reach your goals: 1) write them down; 2) break big goals into smaller ones to hit along the way; 3) when you reach a milestone, celebrate it!–experts say fun is a key ingredient in any successful venture.

Review of Last Week

STRONG FUNDAMENTALS… Worry over tariffs persists, but last week’s economic fundamentals were so good investor optimism triumphed, sending the Dow and S&P 500 up for the fourth week in a row. But the Nasdaq dipped thanks to some tumbling tech stocks.

With more than half the S&P 500 companies reporting, Q2 profits are up an average of 24.6% over last year and, more importantly, sales are up nearly 10%–solid evidence of growing demand.

Q2 GDP growth came in at 4.1%, with consumer spending up 4% and business investment up 9.4% this year. Some question if such growth is sustainable, but others feel the US economy is the strongest it’s been in a decade.

The week ended with the Dow UP 1.6%, to 25451; the S&P 500 UP 0.6%, to 2819, and the Nasdaq down 1.1%, to 7737.

Bond prices were kept in check by the positive economic data. The 30YR FNMA 4.0% bond ended down .25, to $101.56. In Freddie Mac’s latest Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate shifted a tick higher. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?

The homeownership rate grew to 64.3% in Q2, up from 63.7% in Q2 of 2017. That’s 1.8 million owner-occupied households added in the past year!

This Week’s Forecast

JAM PACKED WITH DATA, PENDING HOME SALES TO THE FED… Analysts predict a gain in June Pending Home Sales, so expect a near term bump in existing home sales. Inflation should edge up by Core PCE Prices and the Employment Cost Index. Also forecast up is Personal Spending, manufacturing by the ISM Index and Chicago PMI, and Nonfarm Payrolls. Not seen going up are rates, in the Fed’s FOMC Rate Decision.

The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Jul 30 – Aug 3

Date Time (ET) Release For Consensus Prior Impact
M
Jul 30
10:00 Pending Home Sales Jun 0.2% -0.5% Moderate
Tu
Jul 31
08:30 Employment Cost Index Q2 0.7% 0.8% HIGH
Tu
Jul 31
08:30 Personal Income Jun 0.4% 0.4% Moderate
Tu
Jul 31
08:30 Personal Spending Jun 0.5% 0.2% HIGH
Tu
Jul 31
08:30 Core PCE Prices Jun 0.2% 0.2% HIGH
Tu
Jul 31
10:00 Chicago PMI Jul 62.0 64.1 HIGH
Tu
Jul 31
10:00 Consumer Confidence Jul 126.6 126.4 Moderate
W
Aug 1
10:00 ISM Index Jul 59.4 60.2 HIGH
W
Aug 1
10:30 Crude Inventories 07/28 NA -6.2M Moderate
W
Aug 1
14:00 FOMC Rate Decision Aug 1.75-2.00% 1.75-2.00% HIGH
Th
Aug 2
08:30 Initial Unemployment Claims 07/28 220K 217K Moderate
Th
Aug 2
08:30 Continuing Unemployment Claims 07/21 NA 1.745M Moderate
F
Aug 3
08:30 Average Workweek Jul 34.5 34.5 HIGH
F
Aug 3
08:30 Hourly Earnings Jul 0.3% 0.2% HIGH
F
Aug 3
08:30 Nonfarm Payrolls Jul 190K 213K HIGH
F
Aug 3
08:30 Unemployment Rate Jul 3.9% 4.0% HIGH
F
Aug 3
08:30 Trade Balance Jun -$45.6B -$43.1B Moderate
F
Aug 3
10:00 ISM Services Jul 58.5 59.1 Moderate

Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months…Almost no one sees a rate hike from the Fed this Wednesday, but a tick up is expected in September, then no increase in November. Note: In the lower chart, a 3% probability of change is a 97% certainty the rate will stay the same.

Current Fed Funds Rate: 1.75%-2.00%

After FOMC meeting on: Consensus
Aug   1 1.75%-2.00%
Sep 26 2.00%-2.25%
Nov   8 2.00%-2.25%

 

Probability of change from current policy:

After FOMC meeting on: Consensus
Aug   1            3%
Sep 26          94%
Nov   8          13%

Statistics source: www.markettrends.com

Material in this article from: Inside Lending Market Snapshot

This is an advertisement for Jim Passi. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in this message is the property of Citywide Home Loans and cannot be reproduced for any use without prior written consent. This message is intended for business professionals only and is not intended for distribution to consumers or other third parties. The material does not represent the opinion of Citywide Home Loans. Citywide CO NMLS #67180. Regulated by the Division of Real Estate.

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Jim Passi
Regional Manager
NMLS# 158000

1300 East Woodfield Road, Suite 302
Schaumburg, IL 60173
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Office: 847-273-3265

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