Our Real Estate Blog

Weekly Preview - 5/31/2010

June 1st, 2010 8:43 AM by Lehel S.

Last Week; the Treasury markets saw some slight increase in interest rates in another volatile trade, mortgage rates were essentially unchanged. The was marked with Treasury selling another $113B of notes and surprising jumps in existing and new home sales (+7.6% and +14.8% respectively). Two reports on consumer confidence and sentiment were a little better than a month ago but not much significance as both the Conference Board's consumer confidence and the U. of Michigan's consumer sentiment reports are mostly emotional readings predicated on how the stock market and interest rate markets are performing. By the end of the week after continued high market volatility the stock market ended with not much change from the previous week. The sovereign debt problems in Europe continue to be the dominate concern in the equity markets; Fitch, the rating agency down-graded Spain's sovereign debt rating from AAA to AA+ adding to the angst that debt issues may become more strained.
 
This Week; expect more market volatility in the equity and interest rate markets. The stock market, based on the key indexes, is still too high given the concerns emanating in Europe and what we see as a slowdown in China's expansion. The outward driver for US markets is captured in the movement of the euro currency; as it declines against the dollar US stock markets will  be pressured. The euro may find support at $1.20 dollars per one euro (Friday the level was $1.23). No Treasury borrowing this week; the giant this week is the May employment data on Friday (early estimates are an increase of 500K jobs with unemployment at 9.8%). Tuesday a key data point on the manufacturing sector (ISM index), Thursday its the ISM services sector report. Expect increased concerns that the US economy will slow based on the previous excessive bullish outlook that had rallied equity markets. No inflation and increasing concerns that the economic outlook is weakening will support low interest rates for many more months.
Posted in:General
Posted by Lehel S. on June 1st, 2010 8:43 AM

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