Weekly Economic Update

Weekly Economic UpdateTHREE KEY REAL ESTATE INDICATORS IMPRESS

All of a sudden, the housing market looks much healthier. The Census Bureau reported a 6.8% jump in new home buying in April, and the National Association of Realtors said its pending home sales index improved 3.4% in that month to 108.7 (its best reading since May 2006). The numbers that matter most were also impressive: year-over-year, new home sales were up 26.1% and pending home sales 14.0% (even as existing home inventory declined). Additionally, the March 20-city S&P/Case-Shiller home price index showed a 5.0% annualized gain (the broader national home price index rose 4.1% in 12 months).1,2

 

HARD GOODS REPORT PRESENTS MIXED MESSAGE 

Total durable goods orders fell 0.5% in April, yet the Commerce Department found core durable goods orders (excepting transportation orders) up 0.5% for that month. Shipments of core durables rose 0.8% in April after a 1.0% gain for March.3

 

CONSUMER SENTIMENT HOLDS UP

That was evident in the two major surveys of households. The Conference Board’s consumer confidence index rose 1.1 points for May to 95.4; the University of Michigan’s final May index reached 90.7 after its previous 88.6 reading.4

 

Q1 GDP: WORSE THAN PREVIOUSLY THOUGHT

In its second estimate, the Bureau of Economic Analysis said the economy contracted 0.7% in the first quarter, which precisely matched the consensus forecast at Briefing.com.4

 

MAY ENDS WITH A DOWN WEEK

From Tuesday’s opening bell to Friday’s close, the Dow lost 1.50%, the Nasdaq 0.41% and the S&P 500 0.88%. The Friday settlements for the big three: Dow, 18,010.68; Nasdaq, 5,070.03; S&P, 2,107.39.5

 

THIS WEEK: April’s personal spending report, the May ISM manufacturing PMI and China and euro area factory PMIs arrive Monday. Investors review May auto sales and factory orders Tuesday along with earnings from Cracker Barrel, Guess? and Dollar General. Wednesday brings the May ADP employment report, a new Beige Book from the Federal Reserve and ISM’s May non-manufacturing PMI. On Thursday, Wall Street looks at May’s Challenger job-cut report, new initial claims figures and earnings from VeriFone and J.M. Smucker. The Labor Department issues its May jobs report Friday.

 

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +1.05 +7.86 +15.54 +7.08
NASDAQ +7.05 +19.35 +24.93 +14.43
S&P 500 +2.36 +9.76 +18.69 +7.58
REAL YIELD 5/29 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.32% 0.22% 1.32% 1.67%

Sources: wsj.com, bigcharts.com, treasury.gov – 5/29/156,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

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Citations.

1 – forbes.com/sites/erincarlyle/2015/05/28/april-pending-home-sales-hit-nine-year-high/ [5/28/15]

2 – inman.com/2015/05/26/real-estate-market-update-may-26-2015/ [5/26/15]

3 – investing.com/news/economic-indicators/u.s.-durable-goods-orders-drop-0.5,-core-orders-rise-0.5-343505 [5/28/15]

4 – briefing.com/investor/calendars/economic/2015/05/25-29 [5/29/15]

5 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [5/29/15]

6 – markets.wsj.com/us [5/29/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F29%2F14&x=0&y=0 [5/29/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F29%2F14&x=0&y=0 [5/29/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F29%2F14&x=0&y=0 [5/29/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F28%2F10&x=0&y=0 [5/29/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F28%2F10&x=0&y=0 [5/29/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F28%2F10&x=0&y=0 [5/29/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F27%2F05&x=0&y=0 [5/29/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F27%2F05&x=0&y=0 [5/29/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F27%2F05&x=0&y=0 [5/29/15]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/29/15]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/29/15]

 

 

 

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