As we head into the holiday weekend, it’s always good to know what’s been going on in the economic world.  Lucky for us, Syd Leibovitch has helped us out by providing his latest market update – which covers both the end of the week and the June month end numbers.

 

Stock markets have big loses in the last days of the month, but recover some of the losses on July 1  –  World markets dropped across the board on the reality of a Greek debt default. It was widely thought that a last minute deal would be made to keep Greece from defaulting on its debt payments. Greek banks were closed to prevent a run on the banks. Citizens were allowed to withdraw 60 euros a day, about $66, from ATM machines. It is uncertain if a deal will be made or if Greece will leave the Euro, which will certainly cause a deep recession or depression in Greece, as they find a new currency and stabilize the transition. It will also cause slowing in Europe, as much of the debt is owed to other European Countries, and to private investors.  The estimated amount of Greek Debt is about 250 billion euros. It is still widely felt that a deal will be made and Greece will remain in the Eurozone.  The Dow Jones Industrial Average closed the month at 17,596.35, down from 18,010.68 on May 30. On July 2 it improved and closed the week at 17,730.11.  The S&P 500 closed the month at 2057.64, down from 2,107.03 at the end of May.  The S&P closed the week,  July 2nd, at 2,076.68. The NASDAQ closed the month of June at 4,958.57, up from  4,942.24 on May 30.

It also improved and closed the week, on July 2nd , at 5,009.21

Treasury Bond yields are up for the month – The 10 year Treasury bond yield closed the month at 2.35%, up from May’s close of 2.12%. It closed the week at 2.40%. The 30 year treasury bond yield closed June 30 at 3.11% , up from May’s close of 2.88%. It was 3.19% to close the week.

Mortgage Rates rise slightly in June  –  The 30 year fixed rates ended the month around 4.10% for loans up to $417,000, and around 4.375% for loans over $417,000.  The 15 year fixed rate loans are about 3.375% for loans up to $417,000, higher loan amounts have rates that are around 3.50%. 5 Year-ARM rate is around 3.00% and 1 Year-ARM mortgages are around 2.75%.

California has robust job gains in May, yet unemployment rate rises – California’s employers added 54,200 jobs in May. The state’s unemployment rate rose to 6.4% in May from  6.3% in April as more workers entered the job market.

U.S. Employers add 223,000 jobs in June  – unemployment rate drops to 5.3% –  The Labor Department reported that US employers added 223,000 non-farm new jobs in June.  The unemployment rate fell to 5.3%, its lowest level since April 2008. This was good news which showed that the economy is continuing to gain strength. The negative part of the report was that wage gains, which seemed to be picking up in April and May, were disappointing in June. Wages were up just 2% for the year which is well below the Federal Reserve’s target of 3.5%.

U.S. Consumer Confidence Rises – The University of Michigan reported that their consumer sentiment index rosefrom 90.7 in May to 96.1 in June. This was the highest level since January when the rating of 98.1 shocked experts. That was the highest rating in more than a decade. Last June the index was 82.5. For the first 6 months of 2015 consumer sentiment has improved at the highest pace since 2004. This increase is important because it suggest that consumer spending, which accounts for a majority of the economy, will continue to increase.

New home sales hit 7 year high – The Commerce Department reported that new home sales in May jumped 2.2%from April to a seasonally adjusted annual rate of 546,000 units. This marked the highest level of new home sales in 7 years. New home builders said that fears of higher interest rates contributed to buyer demand, as buyers rushed to lock in rates before they increase further later in the year.

U.S. home resales jump 5.1% – Prices continue to rise – The National Association of Realtors reported that sales of previously owned homes jumped 5.1% in May from April figures. This was a strong number which beat analysts’ expectations. One comment that was made by Lawrence Yun, the chief economist at NAR, was, “ Strong job growth for young adults and low down-payment programs are helping more young buyers enter the marketplace. The return of first time buyers in May is an encouraging sign.” The median price also showed strength rising 7.9% from one year ago for the nation as a whole. The median price in the west grew 10.2% from a year earlier and 4.3% from April.

Pending home sales hits highest level in 9 years – The National Association of Realtors reported that homes under contract rose again in May to their highest level since April 2006. The index has increased for nine consecutive months on a year over year comparison. A sign of how robust the real estate market is.

Resale home sale pace continues to exceed last year – The California Association of Realtors reported that statewide home sales of existing single-family homes totaled 423,360 in May on a seasonally adjusted annualized rate. That wasdown 1.1% from April, but up 8.9% from May 2014. It was the second straight month that statewide sales were above the 400,000 annualized mark. Last year we saw sales below the 400,000 sales mark, which was about 14% below the rate of an average year since 1988. This year we are still below average sales rates, but much closer than last year. Low inventory is one factor that is keeping sales numbers down. CAR reported that there is just a 3.5 month supply of homes on the market. A 6 to 7 month supply is a normal market.

Home prices continue to rise – The California Association of Realtors reported that the median price paid for a resale home in California increased 0.8% in May from April, and 4.4% from May 2014. While price gains are moderating from double digit gains seen in 2012, 2013, and the beginning of 2014, they are still increasing. CAR also released more local statics. Los Angeles County had prices up 1.3% from April and 5.1% from last May. Ventura County had prices up 3.7% from April and 8.2% from last May. Orange County had prices up 1.8% from April and just 2.8% from last May.

U.S. Producer prices record their biggest increase in 2 1/2 years – The Labor Department said its producer price index for final demand increased 0.5% in May,  the largest gain since September 2012. Much of the gain was due to rising gas and food products.

Retail sales jump – The Commerce Department reported Thursday that retail sales jumped 1.2% in May. This was encouraging news which beat expectations and showed that Americans sharply stepped up their spending despite harsh weather.

Have a great 4th of July Weekend!
Syd


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