I love that Syd Leibovitch provides market updates so that I can stay informed easily.  Here’s the latest economic update to keep you ‘in the know’.

Stocks had a wild week – Stocks dropped early In the week as fears of Greek’s failed debt talks, and the results of a vote to turn down the reforms proposed by creditors were announced. Thursday and Friday it appeared that a deal was in sight. No deal by next week could cause Greece to leave the Euro. This could cause slowing throughout Europe, experts say. A new deal that has been approved by the Greek Prime Minister and Parliament which would include a new 3 year loan is now with the European Union for approval. After a two week shut down of Greek banks, Greece has now agreed to many of the reforms that they would not do just a couple of weeks ago. It’s not all the reforms that the European Union were looking for, but it is a good compromise, which experts may will end the crisis. Chinese Stocks have dropped over 30% this year. Their markets recovered a little at week’s end. All this caused stocks to fall early in the week, and rise Thursday and Friday. The Dow Jones Industrial Average closed the week at 17,760.41, slightly higher than last week’s close of 17,730.11.  The S&P 500 closed the week at 2,076.62, unchanged from last week’s close of 2,076.68. The Nasdaq closed Friday at 4,997.70, down slightly from last week’s close of 5,009.21.

Treasury Bond yields end volatile week unchanged from last week –  Several factors caused rates of fluctuate this week. Greece looked like a deal to keep them from leaving the Euro would not happen early in the week, but progress was made Thursday and Friday. China’s stock markets, which are down about 30% for the year improved on Thursday and Friday. Janet Yellen said Friday that a rate hike by the Fed this year is still expected. Interest rates dropped early in the week. The 10 year treasury closed Wednesday at 2.22%, its lowest level in several weeks, before jumping back almost 1/4% Thursday and Friday. The 10 year Treasury bond yield closed the week at 2.42%, just above last week’s close of 2.40%The 30 year treasury bond yield closed Friday at 3.20%, almost unchanged from 3.19% last week.

Mortgage Rates end week the same as last Friday –  After dropping almost a quarter of a percent by Wednesday, rates rose nearly a quarter percent on Thursday and Friday to end the week back were they were last week. 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%.

Federal Reserve gives mixed messages – Minutes released Wednesday from the Fed’s June meeting showed that just one of the ten voting members were in favor of raising interest rates.        With strong job gains and unemployment at a 7 year low it is widely felt a rise is coming.  The report indicated that the Fed wanted to wait and see what effect a Greece default,  slowing in Europe, a significant drop in the Chinese stock market, and a strong dollar would have on growth here at home. Earlier in the year there were more voting members in favor of a rate hike than there were in the June meeting. Rates dropped on bonds and mortgages after the report was released. Friday Fed Chairperson, Janet Yellen in a speech in Cleveland said, ” it will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy.” This statement caused bond and mortgage rates to rise. The Federal Funds Rate has been near zero for 7 years in an attempt to stimulate the economy. The last time the Fed rose rates was 2006.

June’s price and sales date will be released in the next couple of weeks. From what I am seeing I would not be surprised to see the unsold inventory rise from the 3.5 month supply last month. It seems that while the real estate market is still quite strong in the highest price ranges we are seeing some sluggishness in many areas. Even new homes, which we have seen selling at record prices, have begun to sit when priced too high. I’d expect to see the month over price gains begin to moderate. Year over year they will still show strong gains because of a nice run up the first half of 2015.

Have a great weekend,
Syd


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