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Written by Jonathan Dienhart
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02.25.2010 |
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Housing data was weak on all fronts with sales and pricing in both the new and existing home markets posting declines in the first month of 2010. Although bad weather conditions may have contributed to some of the weakness, it is not good news that extraordinarily low mortgage rates and the extended homebuyer tax credit were insufficient to boost sales activity. New home sales volume hit an all-time low in January while existing home sales fell to its slowest annual pace since June. Exceptionally bad weather conditions in February throughout most of the U.S. will likely result in subdued sales activity again, which would be reflected in the data released next month. The extended federal tax credit now expires at the end April, so it’s likely we’ll see a run up in activity as we near that point, with a potential “clash-for-clunkers” type drop-off in sales activity for the month following. | | This item includes 1 comment |
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Written by Jonathan Dienhart
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01.30.2010 |
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The downward trend in the markets continued in an eventful week of news, economic data, and earnings announcements. The broader S&P 500 index finished trading on Friday down almost 1.0% for the day and down about 1.6% for the week. The S&P 500 index closed at its lowest levels since November 6th on Friday and has fallen 6.6% since its 2010 highs just less than two weeks ago. Equities did not respond well despite President Obama’s first State of the Union address in which he focused on jobs and reviving the U.S. economy. The Fed also held its first meeting of the year in which they kept their target Fed Funds rate unchanged at a range of 0-0.25% while stating that the economy continued to show signs of improvement. The recent correction may be due to some profit-taking and a sign that the market has taken a more cautious approach after posting huge gains since March of last year. The big market mover to keep an eye on in the coming week will be January employment figures to be released on Friday. | | No comments for this item |
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Written by Jonathan Dienhart
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01.22.2010 |
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The market continued its downward trend this week sparked primarily by economic concerns in China and talk of stricter regulations in the banking industry. The market is on pace to record its third consecutive day of losses on Friday. In afternoon trading, the broader S&P 500 index is trading 0.7% lower at 1,109. The S&P 500 index is currently trading down about 2.4% for the week and if the selling persists, this will be its lowest close since the year began. In the previous trading session on Thursday, stocks suffered their largest single-day percentage decline since October. | | No comments for this item |
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Written by Jonathan Dienhart
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01.08.2010 |
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The biggest economic news item this week was today’s December employment report, which showed a larger than expected loss to close out a dismal 2009. The job losses posted in December represent another sobering reality check that conditions in the labor market are still weak. Businesses are still battling the slower economy and many are still reorganizing to remain competitive in the current environment, as evidenced by UPS’ recent announcement that it would be cutting its workforce by another 1,800 jobs. On the housing front, the National Association of Realtors reported the first drop in its pending home sales index in the last 10 months while the Labor Department reported that jobless claims edged up slightly over the past week. | | No comments for this item |
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Written by Jonathan Dienhart
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12.18.2009 |
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As our last Key Indicator Summary for 2009, we at Hanley Wood want to wish all of our readers and clients a safe and happy holiday! Equity markets remained fairly steady throughout the week as renewed fears in the labor markets offset positive housing data earlier in the week. On Thursday, initial unemployment claims posted an unexpected increase for the second consecutive week which reignited concerns that labor market conditions may not have stabilized just yet. This followed a report on Wednesday from the Commerce Department that new home starts rebounded 8.9% in November while building permits rose 6.0%. Housing starts were driven by a jump in multi-family activity which was coming off record lows in October. Leading economic indicators also posted an increase for the eighth consecutive month which suggests economic conditions will continue to improve going into next year. | | No comments for this item |
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Written by Jonathan Dienhart
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12.11.2009 |
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Consumers became more optimistic and loosened up their wallets in November which helped boost retail sales figures and consumer sentiment data released on Friday. U.S. retail sales jumped 1.3% in November driven by a strong start to the holiday shopping season. Retail sales in November posted its strongest monthly gain since August when retail sales surged 2.4% due to the government’s Cash for Clunkers program. It will be important to watch December retail sales figures when they are released next month to see if there was sustained consumer activity throughout the holiday shopping season or if November retail sales were just boosted by bargain-hunters capitalizing on early holiday deals. The University of Michigan/Reuters Index showed consumer sentiment increasing to its highest level since September which enforces the notion that consumer strength has reemerged. | | No comments for this item |
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Written by Jonathan Dienhart
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12.04.2009 |
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News about the housing market has been fairly positive as of late. Pending home sales, existing home sales, and new home sales all recorded gains in October. Demand over the past several months has been driven in part by government incentives. Meanwhile, Federal Reserve purchases of long-term treasuries, agency debt and mortgage-back securities from government-sponsored enterprises have driven mortgage rates to record lows. Average 30-year fixed-rate mortgages hit its lowest levels this week since Freddie Mac started tracking the data in 1971. | | No comments for this item |
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Written by Jonathan Dienhart
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11.20.2009 |
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A sharp drop in housing starts and building permits raised further concerns about a recovery in the housing market, spurring a three day sell-off in equity markets. The plunge in building activity, however, was at least partially attributable to the anticipated expiration of the original federal homebuyer tax credit at the end of November. The tax credit has since been extended and expanded to include existing primary homeowners as well. Though financial markets viewed the figures with pessimism, starts and permits are a measure of supply only. While it may not be encouraging to see supply so low, it’s not an entirely bad thing to have these levels remain subdued until sales activity improves more substantially. Adding additional units to the market not supported by demand would only result in further price declines. | | No comments for this item |
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Written by Jonathan Dienhart
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11.17.2009 |
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Despite extremely low mortgage rates and an ongoing home buyer tax credit, the pace of mortgage applications slowed substantially in recent weeks. And while existing home sales seem to be improving, likely as a result of foreclosure and bank-owned property sales, new home sales have not shown quite the same hopeful signs of recovery. As a possible result, housing starts in October declined more than expected, suggesting home builders are being wisely cautious at adding additional supply to the fragile market. | | No comments for this item |
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Written by Jonathan Dienhart
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11.12.2009 |
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Last weekend, the G20 stated that they would continue to support global economies which caused stocks to jump earlier in the week. The G20 finance ministers said they would maintain their current plan to stimulate their respective economies with emergency support initiatives although many nations are already recovering. The plan to keep pumping money into the global system in order to spark growth is seen as a positive sign for businesses by most equity markets, and shows the commitment of the world’s largest economies to the current monetary policy strategy. | | No comments for this item |
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Economics 
