Another strong stocks week as they continue to rise for the 6th week straight – reaching records highs. Bonds are also on the rise while the mortgage rates are stagnating. Wondering what all this means? Check out the weekly financial market update to help keep you ‘in the know’.
Stocks markets continue to rise – Indexes reach record highs for sixth straight week – U.S. stocks rose again this week, reaching record highs for the sixth week in a row. Market gains were attributed to additional third quarter company earnings that beat expectations. 20% of companies in the S&P 500 that have reported earnings for the third quarter reported earnings growth of nearly 2%, and 76% of the companies have reported results above expectations. Disappointing earnings from GE, whose stock dropped sharply were offset by across the board gains. Stocks also rallied after the Senate passed a 2018 budget resolution. We expect earnings to continue to rise at a solid pace through the remainder of the yearThe Dow Jones Industrial Average ended the week at 23,328.63, up from 22,871.73 last week. It’s up 18% year to date. The S&P 500 closed the week at 2,575.21, up from its close last week of 2,563.17 The S&P is up 15% YTD. The NASDAQ closed the week at 6,629.05, up from its last week’s close of 6,605.80 It’s up 23.1% year to date.
Bond yields higher this week – The 10-year Treasury bond closed the week at 2.39%, up from 2.28% last week. The 30-year treasury yield ended the week at 2.89%, up from 2.81% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.
Mortgage Rates almost unchanged – The October 19, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.88%, down from 3.91% last week. The 15-year fixed was 3.19%, down from 3.21% last week. The 5-year ARM was 3.17%, down slightly from 3.16% last week. Rates rose late in the week so next week’s rates will be slightly higher.
U.S. new housing starts drop 4.7% in September – Hurricane damaged region accounts for the drop – The Commerce Department reported that permits for new residential construction dropped 4.7% in September. Single family housing starts dropped 4.6% from August. The September decline was attributed to hurricane damaged areas. Year to date housing starts are up 9.1% from the same period last year. Breaking out single-family housing, the hurricane damaged South posted a 15.3% decline in single-family housing starts in September. All other regions in the U.S. posted month over month gains in new single-family housing starts. Month over month housing starts are up 15.7% in the western region. Multi-family housing starts were down in almost every region.
California existing home sales and prices continue to creep up in September – The California Association of Realtors reported that existing, single-family home sales totaled 436,920 in September on a seasonally adjusted annualized rate. That’s up 2.2 percent from August and 1.7 percent from last September. The statewide median home price was $555,410, down 1.8 percent from August and up 7.5 percent from September 2016. Statewide active listings continued to decline in September, dropping 11.2 percent from a year ago. The unsold inventory index in September represented a 3.2 month supply of homes for sale, down from a 3.5 month supply in September of 2017, yet up from 2.9 months in August.
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