Much of this week was shadowed by the Fed and their warning of a slowing economy over the past months. They kept the Feds Funds Rate unchanged and leaves the interest rate target at 0 to 1/4%. The FOMC also said they will keep rates exceptionally low for an extended period of time. Something positive they said was that inflation is likely to be subdued for sometime which I thought was good. Today’s weekly jobless claims was up 2,000 to 484,000 for the week ended 8/7. The problem I see and the market is thinking is that at some point the Fed will run out of carrots from that magic hat! What we need now is for the Government to step back and let things work out on their own. They have done alot and spent more than $800 Billion to assist the weak economy. No amount of Government spending can jump start an economy.

1 out of 4 Sellers said they lowered their prices in July. They lowered there prices an average of 10%. July Single Family Pending Home Sales (put under agreement) was down 18% year over year and Condo’s were down 28%. This was the 3rd straight down number for pending home sales which brings up a good question is a double dip recession coming for the housing market? Its hard to believe with rates at record lows why isn’t the housing market improving? I think the answer is simple. Consumer Confidence, Jobs, and the Economy…. It seems some buyers are worried about values but, one thing is for certain its a buyers market and it may never be a better time to buy.

The DOW so far this week has been down more than 350 points to 10,320.

Gold is at $1,217 an ounce and Oil is at $76 a barrel.

Rates have done well again. 30 year fixed rate is at 4.57% w/ .89 points and the 15 year is at 3.95% w/ 1.08 points.

Greg’s Market Report week of July 19th, 2010. It was a pretty good week this week on Wall St. The market saw lots of economic news this week in the housing market and the Fed was on Capitol Hill giving their semi-annual report on the US Economy. June Existing Home Sales were down 5.1% last month which was an increase of 9.8% year over year. The big story was that inventories were up 2.5% to 3.99 Million units for sale which represents a 8.9 month supply!

What is a bit concerning is that these are numbers when the Home Buyer Tax Credit Program was still going on in April and they were still weak. 1st time buyers still represent 43% of the market and all cash buyers are a staggering 27%! This is the breakdown of Existing Home across the region. Northeast was up 7.9%, Midwest was down 7.5%, South was down 6.5%, and the West was down 9.3%. Distressed sales are still 1/3 of all market transactions 32%. Foreclosure sales are falling as short sales are rising. 30 Year Fixed Rate National Average was down to 4.59% and the 15 Year was down 4.05%. June Building Permits were up 2.1% as June Housing Starts were down 5.0%. One step forward and two steps back.

1st Time Initial Jobless Claims rose more than expected up 37,000 to 464,000 week ended July 17. This number was alittle out of line from expected but continuing claims week ending July 10th were better than expected at 4.487 Million vs the prior week 4.710 Million.

The Fed Chairman Ben Bernanke was on Capitol Hill to give his testimony on the condition of the US Economy on its Semi Annual Address. I felt most of the 2 day address was pretty positive. The fact is that most of this information is old and we already know most of these facts. Even though, the market sold off on Wednesday but rebounded on Thursday. Most of the concern of the testimony was about the exist strategy plan when the Fed eventually has to start raising rates. This isn’t necessarily a bad thing cause it means the worst is behind us and the economy is getting better. Some of the highlights was the following.

*Fed expects inflation to be subdued
*Unemployment is improving
*Expansion is proceeding at a moderate pace
*The Fed still has tools in its tool box if the economy does slow
*Financial Regulation Bill will enforce stronger standards which will minimize risk of another crisis

The one statement the markets didn’t like was that the Fed feels that the economic outlook remains unusually uncertain!

The way I see it is that the real problem is the Federal Government and their unwillingness to understand that it is small business that will help the economy with job growth. If you easy the burden on small businesses with lower tax rates it will help expansion and further growth. The Federal Government has only gotten bigger and they are now taking a bigger role in the private sector which is only going to create bigger problems, more regulation, and higher taxes. This is clearly not the way to prosperity. The good news is that even with this negative environment companies area coming out with big earnings and things look a recovery is coming!