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!

Greg Afarian’s Market Report Week of July 12th to the 16th. Not a ton of economic news this week and the Dow traded flat for the week. Producer Price Index came out this week, which measures inflation on the consumer’s side and it was down .5% for June. Excluding food and energy the core rate was up .1%. This was a better than expected number and shows that inflation at the current time is not an issue. Many people are questioning if deflation might be an issue but, at the current moment that is unlikely.

Jobless Claims for people that are filing for their 1st time week ending July 10th was down 31,000 to 429,000. That was also a better than expected number but the number that I thought was concerning was the continuing claims figure which was up to 4.681 Million vs. 4.4 Million the prior week.

Falling home prices, 24% of all sellers on the market say they have dropped prices at least once since 7/1. That is a 9% increase from June! 30 year fixed rates are stable at 4.69% and the 15 year fixed rate is at 4.12%

Interesting news, iphone 4 is it a lemon? Yankees Owner George Steinbrenner dies at the age of 80. Bought the Yankees in 1973 for $8.7 Million now worth more that 1 Billion plus 2 other companies work well over another Billion!China growth slows to 10.3% in Quarter 2 and better than expected inflation numbers for them makes it seem things are pretty well in check.

My final thoughts…. Deflation is the big risk even though it may be unlikely. The $64,000 question is with very little inflation and rates at record lows how is the Fed going to engineer a successful exit strategy with what we call a “Soft Landing”. What they will eventually have to do is start-raising rates and the question will be how the markets react when that happens. I still feel that we need to keep rates low to help businesses and consumers. You also need to keep taxes low so that Americans to help consumers to continue to spend. I wouldn’t want to repeat what happened in the early 2000’s and if history does repeat itself that could be a bad situation for everyone!

Greg Afarian’s Market Report week of July 6 to July 9th. The Market Rebounds after 3 weeks of selling off as stocks see there best week in a year.The DOW was up more than 468 points this week. Many Wall Streeter’s feel this could be a summer rally, I think after the huge run off it was more like a relief rally.

This week was a short week of trading due to the observance of the 4th of July. Not alot of key economic news this week. June Same Store Sales was weak as the consumer is slowing their spending and it seems a pattern of selective spending could be a trend.

The 30 Year hit an all time low / record as the 30 YR Fixed Rate dips to 4.57% and the 15 YR Fixed Rate is at 4.07%. Mortgage Apps this past week for Refi’s were up 9.2% and purchase apps were down 2.2%. Purchase apps are down 30% since April which seems as though the ending of the Home Buyer Tax Program is really effecting the market.

Oil is at $76.39 a barrel and Gold is at $1,212 an ounce. Weekly Jobless Claims were better than expected for the week ending of 7/3 with 1st time claims falling 21,000 to 454,000. Stocks in the news, Google is back in China and Zillow & Yahoo make a partnership for online real estate advertising.

About the Me: The above Real Estate information was provided by Greg Afarian, l can be reached via email or send me a message on Twiter Have a home to sell on the NorthShore in Mass? I’ll help you with my social media skills for a quick transaction to help save you time and money. I service the following towns in Boston and the Greater Boston Area. Andover, North Andover, Lawrence, Methuen, Haverhill, Boxford, Bradford, Dracut, Reading, North Reading, and beyond.

Greg Afarian’s Market Report for the week of 6/28 to 7/2. This has been a pretty negative week for stocks and the housing sector. The only bright side for housing was interest rates that saw the 30 year fixed rate hit a 50 year low.
30 Year Fixed Rate National average at 4.67% and 15 Year fixed Rate National Average at 4.06%. Todays employment report was better than expected with 125K non-farm payroll jobs added in the month of June. The private sector added 83K jobs and the unemployment report dipped to 9.5% which is the lowest since June 2009. It didn’t stop the market from selling off. The Dow lost 10% in the 2nd quarter as it loses another 450+ drop this week.

Apple was in the news again this week as it had the most successful product launch with its new iphone. It sold 1.7 Million Units in the 1st 3 days. Apple is 2nd to Exxon Mobil as the largest / most valuable company in US! Consumer Confidence falls in June to 52.9% which pushed the market lower. Gold was stable this week at $1,212 an OZ and Oil is at $72.41 a barrel.

Pending Home Sales fell off a cliff in May 30% and was down 16% year over year. It was down 32.6% in the Northeast, 32.1% in the MidWest, 33.3% in the South, and 20.9% in the West. 30 year fixed rates are at 50 year lows! 30 year average is at 4.67% and the 15 year fixed is at 4.06%.

The popular Home Buyer Tax Credit Program was extended for those people that were under contract to 9/30. Many people are questioning if the $800 Billion Stimulus worked? I would look at it as putting a band aid on a gushing wound. It may help at the beginning but won’t last long. I feel that we need to be helping all the other people that pay taxes. We need to cut taxes across the board to stimulate business growth. It’s when business owners feel confident is when the rest of the economy will follow.

The Dow was down 400 points this week as worries about the weak housing market, the war, and problems with BP’s Oil Spill Disaster continue.

Existing Home Sales fell 2.2% in May and inventories rose to a 8.3 month supply. Sales were down 18.3% in the Northeast, unchanged in the Midwest, up 4.9% in the West, and up .5% in the South.
May New Home Sales (contracts signed in May for New Construction) was down a whopping 32.7%. It was the weakest new home sales figure ever! The ending of the home buyer tax credit program is really affected the housing market in a negative way (if you ask me). Now the $64,000 question is what happens to existing home sales going forward? Will we have a double dip in the housing sector? It’s anyone’s guess. One thing is for certain its a great time for buyers!

The Fed left the Fed Funds Rate Unchanged and the FOMC said they are keeping the Fed Funds target rate at 0 to .25%. They also said inflation will most likely remain at subdued level.

May New orders for Durable Goods falls to a 6 month low down 1.1% excluding transportation it was up .9%

Gold is at $1,256 an ounce and Oil is at $78.88 a barrel

Rates are at historic lows, 30 Year Fixed Rates at 4.69% and the 15 Year Fixed Rate is at 4.19%

Its anyone’s guess what happens with the economy and the markets. There are many things that are factors. The jobs situation is clearly a huge deal, without employment figures changing we are probably dead in the water. The Oil Spill Disaster is a huge issue, it is unclear what the long term affects will be but many people think it could affect the Gulf Region for decades! I sure hope not. The other problem I see is the housing market, I don’t see how this home buyer tax credit program really helped things at all? However, its a great time for buyers! Rates are at historic lows. I think we might go sideways for alittle bit until some of these issues get resolved but, we’ll have to wait and see.

Greg Afarian’s Market Report week of June 14 to the 18th. The Dow was up 250 points this week which saw some stability coming back in to the market. May Producer Price Index down .3% the Core Rate which excludes food / energy was up .2%

May Housing Starts (when construction actually begins) down 10% May Building Permits (when the initial permit is filed) down 5.9% Gold hits an All Time high of $1,265 an ounce and Oil is at $77.21 a barrel

Greg Afarian’s Market Report week of June 14 to the 18th. The Dow was up 250 points this week which saw some stability coming back in to the market. May Producer Price Index down .3% the Core Rate which excludes food / energy was up .2%

May Housing Starts (when construction actually begins) down 10% May Building Permits (when the initial permit is filed) down 5.9% Gold hits an All Time high of $1,265 an ounce and Oil is at $77.21 a barrel

Home Buyer Tax Credit closing date could be extended till September 30th. Fannie Mae and Freddie Mac are going to be delisted from the DOW.

30 Year Fixed Rates at 4.82% and the 15 Year Fixed Rate is at 4.23%

Jobless Rates figures State by State saw 25 States that are below the National Unemployment Rate of 9.7%
Highest Unemployment Rates are Nevada 14%, Michigan 13.6%, California 12.4%, Rhode Island 12.3%
Lowest Unemployment Rates are North Dakota 3.6%, South Dakota 4.6%, Nebraska 4.9%

Market stability isn’t coming anytime soon! This was another volital week that seems to go up one day and sell off the next. Today’s May Retail Sales figure down 1.2% was the biggest decline in the past 8 months. The key questions going forward are, does this have anything to do with the unemployment rate currently at 9.7% and is the consumer all done spending or will they be back? Retail Sales measures the pulse of the consumer and is a key indicator of how the economy may be doing. On the flip side, it seems that the confidence level of the consumer is doing okay. Consumer Sentiment in June (prelim) was up to 75.5% VS May’s figure of 73.6%.

Mortgage applications decreased 5.7% this past week and is down 30.4% since Memorial Day week last year. This is a huge figure and no doubt directly correlated with the ending of the Home Buyer Tax Credit Program. Many people are concerned about weakness coming back to the housing sector. It is still my opinion that there hasn’t been a better time to buy in the past 20+ years. Mortgage rates have been stable and this is great for the housing market. 30 Year Fixed Rate National average was down alittle to 4.81% and the 15 Year Fixed Rate average rose slightly to 4.26%. Home prices gained .9% in April month over month but, down 2.8% year over year.

Yesterday the market saw it’s 3rd best day in 2010 and was up 273 points. It is my opinion which is also shared with alot of other Wall Streeter’s that you should be buying on the dips and selling into the rallies. This is how I would be trading in a market like this. The days of long term investing is gone for right now and the key is to preserve as much of your capital as possible.

Many things still trouble the markets and a resolution to these things don’t seem likely anytime soon. BP’s Oil Disaster is a huge burden, as well as the potential credit crisis spreading in Europe. However, today’s auction of the Spain and Italy Bonds (which went well) seem to indicate the debt issue may not be as bad as people had expected. The Euro stabilizing is another positive sign. I feel gold hitting an all time high on Tuesday $1,245 an ounce is an extremely negative factor hanging over the market and an indication that the market / people feel the debt crisis may not be over. I still believe that if you want our economy to grow we have to stop the massive government spending and cut taxes across the board to promote growth. Since this isn’t the way the current administration is heading (actually directly the opposite) we may be in for some turbulent times ahead.

Big sell off as a weak Jobs Report casts a dark cloud over Wall Street! This seems as though its exactly were we left off last month after seeing the worst decline for the month of May since 1962! This week was all about the continuation of BP‘s Oil Spill Disaster, Jobs Report, and Housing Data.

Today’s Jobs Report was a disappointing figure. The market opened lower this morning with this terrible number and the sell off continued to accelerate throughout the day dropping below 10,000 down 310 points to 9,946. The Department of Labor said that Jobs grew by 431,000 in May but, went on to say that nearly all those jobs were temporary census workers. There were 411,000 census workers added and only 41,000 private sector jobs created. The unemployment rate dipped slightly to 9.7% however there are still 4.66 million continuing to receive jobless benefits. I find this figure to be a huge smoke screen! Why should temporary work be classified as employment? Isn’t the goal of employment to be employed for a long period of time? What happens when this work ends? Will these people then be able to file for unemployment? Sounds like a horrible scenario to me!

Pending Home Sales were up 6% in April and the Index is up 22.4% year over year. Pending Home Sales in the Northeast were up 29.5% in the month of April. These are contracts signed not closed. Many Realtor’s surveyed are unsure if these homes will closes by the June 30th Home Buyer Tax Credit deadline due to the overwhelming amount of short sales and appraisals that are taking longer than expected. May will be the 1st month in 16 months that the Government isn’t paying people to buy homes. I have been saying for quite a long time that these numbers are lagging indicators (old data) and the real news will be what happens after the June 30th date.

Mortgage applications to purchase homes dropped 4.1% this past week. It was down the 4th straight week and down a staggering 40% from last month which is the lowest level since April of 1997! Mortgage rates remain low which is good for the housing market. The 30 year fixed rate national average is at 4.625% and the 15 year fixed rate average is 4.125%.

Out of all the news, I think the most disturbing is the continued failed efforts by BP to stop the oil from pouring into the Gulf of Mexico. I just can’t fathom why it has taken so long to get this thing shut off? It’s also baffling that the oil industry as a whole doesn’t have methods in place for times like these when things go horribly wrong. My heart goes out to all those people in the Gulf that are affected. It’s a terrible situation with no real answer of what the long term effects will be.

Looking ahead we have some big challenges to be dealt with. For me, a major question is how long this economy can run effectively not running on all 8 cylinders? I think there are some major issues abroad in Europe with the credit issues looming to other countries and in China that need to be addressed! What happens if China Real Estate Market (bubble) experiences a similar situation we did in the U.S.?

The employment issue is defiantly a problem as well. The Government needs to give back to small business to encourage employment. That is the only way to grow our economy. Entitlement programs need to be cut, extending unemployment benefits is not the way to get people back to work.

The long term affects of this oil disaster will also have a huge impact moving forward. The amount of work that could be lost along the Gulf Coast could be catastrophic! Some analysts say the loss of jobs alone in the tourism industry could be greater than the fishing industry as a whole. That is a scary thought! I pray that the efforts are successful and things can get back to some sort of normality for these folks.

As goes the economy so does the market? It has seemed like a popular trend the month of May which has seen the DOW down 7.9%! The markets volatility has become an everyday occurrence. Ending the week pretty much flat but, giving you an ulcer if you happen to follow the markets. This was the worst May the Stock Market has seen since 1962! The $64,000 question on the street is whether or not we go into a double dip recession and or if European Credit Crisis spreads into other countries. To top it off with recent issues with North Korea, we can see what is troubling the markets.

The good side of all this is that oil has back off recent highs falling to around $73.50 a barrel. Rates have remained low, which is great for the housing market. The 30 year fixed rate national average is at 4.80% and the 15 year fixed rate average is 4.25%. The troubling news is that the purchase application index fell again this week 3.3% and after last weeks fall of 27.1% Existing Home Sales jumped to 5 month highs in April up 7.6%. Inventories were up 8.4% month supply and sales were up 21.1% in the Northeast year over year. 1st time home buyers accounted for 1/2 of the people buying. These are all lagging indicators and old data. It is pretty clear that the end of the Home Buyer Tax Credit Program had a tremendous effect on the housing market. I feel as though that is a bad thing because the problem going forward is, what is going to stimulate people now? The question now will be what happens in May and June?

Consumer Confidence Index was at 63.3% in May vs. April’s reading of 57.7% The next month will give us a great gauge on what the future has in store for us. The keys going forward will be the Unemployment Rate and the pulse of the consumer. Consumer Spending was unchanged for the month of April and the first time jobless claims fell 460,000 down 14,000. Consumer Sentiment for May was 73.6 which was better than expected. This measures the consumers mood.

My issue is that the way out of a financial problem is for the Government to cut taxes on business which gives the private sector an incentive to expand and create more jobs. It is clear that the unemployment rate which is currently at 9.8% will not be decreasing anytime soon. The Government can not expect prosperity by creating temporary employment like they have with the census workers. The way to economic prosperity is to encourage productivity and innovations. That leads to better products and services which then creates jobs.

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.