This was quite the week for the Market; with the beginning of the week bringing some amazing gains, but they dropped by week’s end.  Labor department reported good news with a job in the jobless rate by 4,000.  Oil prices are fluctuating and Mortgage rates are dropping.  See how your portfolio is fairing in the Market Update.

Stocks hit 2016 highs on Wednesday and lost all the gains at the end the week – Stock market indexes hit their highest levels in 2016 on Wednesday, only to fall Thursday and Friday to end the week pretty much unchanged.  The week started off with comments from Fed chairperson, Janet Yellen, which led investors to believe that an interest rate hike soon would no longer occur after last Friday’s weak jobs growth report.   This was good news to investors as higher interest rates increase borrowing costs which reduce profit.

On Thursday the labor department reported that jobless claims dropped by 4,000 for the week, suggesting that the labor market was stronger than last week’s report implied.

On Wednesday oil hit the highest price per barrel since last July toping $51 a barrel after bottoming out in February at $27 a barrel.  This helped stocks as rising oil prices helps energy stocks and economies in oil producing areas where low prices have led to cuts in production. The number of new rigs increased for the second straight week.  Unfortunately, on Thursday and Friday oil prices dropped back down to about $49 a barrel. stocks retreated, losing all the gains for the week.

The Dow Jones Industrial Average closed the week at 17,865.34, up from 17,807.06 last Friday. The S&P 500 closed the week at  2,096.07, unchanged from 2,099.13 last week. The NASDAQ closed the week at 4,895.55, down from last week’s close of 4,942.52.

Bond yields drop – The 10 year U.S. Treasury bond yield closed the week at 1.64%, down significantly from 1.85% on May 31. The 30-year U.S. Treasury bond closed at 2.44%, also down from 2.63% at the end of May. Mortgage rates follow bond rates so we watch bond rates carefully.

Mortgage rates drop to 3-year low – The Freddie Mac Primary Mortgage Survey released on June 9,  2016 showed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 3.60%. The 15-year fixed average rate was 2.87%.  The 5/1 ARM average rate was 2.82%. Bond yields dropped at the end on the week so rates could be even lower next week.

Have a great week!

Syd


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