U.S. Economy slowed in second quarter
The Commerce Department reported that the Gross Domestic Product (GDP) – the broadest measure of goods and services produced – rose at a 2.1% annual rate in the second quarter. That was down significantly from 3.1% in the first quarter, but above some analysts’ expectations who forecasted that tariffs and trade concerns might drag the GDP to as low as a 1.8% annual increase in Q2. Investors who are awaiting a possible rate cut from the Federal Reserve actually pushed up stock prices, as this report increases the likelihood of a rate cut to stimulate the economy.
Stocks higher this week
Although the second-quarter GDP dropped a full percentage point to a 2.1% annual growth rate in the second quarter, stocks gained ground. That was because investors feel slower growth increases the likelihood of a rate cut by the Fed, which will reduce borrowing costs to companies. Companies reporting corporate earnings have been strong in early reporting. Consumer spending also increased by 4.3% in the second quarter, which is very strong.
The Dow Jones Industrial Average closed the week at 27,192.45, up 0.1% from 27,154.20 last week. It’s up 16.4% year-to-date.
The S&P 500 closed the week at 3,025.86, up 1.7% from 2,976.61 last week. It’s up 20.7% year-to-date.
The NASDAQ closed the week at 8,33.21, up 2.3% from 8,146.49 last week. The NASDAQ is up 25.5% year-to-date.
Treasury Bond Yields
Bond yields dropped this week. The 10-year treasury bond closed the week yielding 2.08%, almost unchanged from 2.05% last week. The 30-year treasury bond yield ended the week at 2.59%, almost unchanged from 2.57% last week. We watch treasury bond yields because mortgage rates often follow bond yields.
Mortgage rates lower this week
U.S. existing home sales numbers decline
U.S. existing home sales numbers declined in June as prices continued to rise. The National Association of Realtors reported that total existing home sales – which include closed sales of single-family homes, condominiums, townhomes, and co-ops dropped 1.7% month-over-month in June from
The median price paid for a home was 4.3% higher than one year ago. That marked the 88th straight month of year-over
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