Stock Market & Andover Real Estate Report

Greg Afarian’s Market Report week of May 17 to the 21st. It seems that volatility is a common trend these days on Wall Street. The Market and Stocks got hammered again this week on worries of a Global slow down, problems looming in Europe and China, and more financial regulation in Washington. It is clear these factor have a dark cloud over the Markets and are effecting them. Stocks hit 3 month lows this week as the Dow plunged 356 points during trading on Thursday. The Dow Closed up 60 points but down 480 points for the week to 10,150. Gold is also down this week to $1,178 an ounce as Oil gets crushed to $69.84 a barrel. Crude is down 20% in the past month as a global double dip recession theory is now on the table.

Consumer Price Index fell in April to .1% and the core rate excluding food / energy it was unchanged. The Consumer Price Index measures and estimates the average price of consumer goods and services purchased by households. This was the smallest gain since 1996 and the word on the street is, could this be a sign of Deflation? Deflation is when prices of goods and services fall faster than the inflation rate which then allows consumers to get more for there dollar.

Housing Starts were better than expected for the month of April up 5.8%. Housing Starts is when the construction actually begins. New Building Permits also came out this week was down 11.5% for the month of April. Many analysts are now starting to say that the housing numbers are going to be greatly impacted by the end of the Home Buyer Tax Credit Program. I have been call this for quite sometime now and the numbers speak for themselves as weekly mortgage applications for purchases fell a whopping 27.1% this was the biggest drop in 13 years!

30 Year Fixed Rates fell this week to 4.83% and the 15 Year Fixed Rate fell to 4.19%. The Fed revised their Gross Domestic Product figures for 2010 to 3.45% vs. previous estimates of 3.15% and real GDP to grow to 4% in 2011 & 2012. The Fed also estimated that unemployment would drop to 9.3% in the 4th quarter of 2010 and fall to 7.05% by the end of 2012. These are aggressive numbers considering that the market seems to be pricing in a double dip recession.

I think we are still not out of the woods. Since many of these economic figures are lagging indicators we’ll only know what happens as we start to move forward from this point. I feel some major problems we are going to have to deal with is Europe and how this Greece situation may effect other countries. China! If their housing market crashes what will the implications be and how that will ripple through the markets? We can’t forget Washington and their crusade to over regulate! This is no doubt a huge negative for the Markets and the more they tinker with policies the least likely things will be better than they are. Criminals always find a loophole, the only thing over regulating does is that it creates larger institutions and discourages the small guy to compete.