Market Update
Friday April 29, 2011 9:45 Am ET
By John Sauro
Lock & Load
A look at the chart below will show that bond prices are inching their way back up to the price highs of 2011and will most likely fall upon hitting the level of resistance. Therefore, I recommend locking in before bond prices drop and rates rise.
Bernanke Press Conference
There were no big surprises from the Fed meeting or from Ben Bernanke’s press conference. As expected there were no change in Fed Funds rate and the Policy Statement remained pretty much the same. Fed chairman Ben Bernanke provided a modestly more rosy outlook for the U.S. economy than he has done in the past, citing gains in household spending, improved confidence, and increased bank lending pointing toward stronger growth in 2011.
Bernanke stated “Although economic growth will probably increase this year, we expect the unemployment rate to remain stubbornly above, and inflation to remain stubbornly below, the levels that Federal Reserve policymakers have judged to be consistent over the longer term with our mandate,” he said in an appearance at the National Press Club in Washington. He also urged Congress to take steps to cut the federal budget deficit to take the budget off an “unsustainable” path. Bernanke was clear that he Fed intends to complete its $600 billion bond buying program in June as scheduled.
Economic News
New Home Sales increased in March from a record low a month ago, according to the IHS Global Insight. Sales of new single-family homes were at a seasonally adjusted annual rate of 300,000 in March, showing growth of 11.1 percent. And demonstrate an upward trend.
The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.2 percent in February from January on a seasonally adjusted basis, slightly better than economists’ median expectations for a drop of 0.3 percent.
Contracts to buy homes were up in March, but sales were uneven across the country and aren’t enough to suggest a rebound in the housing market. Sales agreements for homes rose 5.1 percent last month to a reading of 94.1, according to the National Association of Realtors’ pending home sales index released Thursday. Contract signings are more than 20 percent above June’s index reading, the low point since the housing bust. However, the index is below 100, which is considered a healthy level. Contract signings are usually a good indicator of where the housing market is heading. That’s because there’s usually a one- to two-month lag between a sales contract and a completed deal.
Jobless Claims climbed to 429,000 for the week, well above expectations and above that psychologically important 400k level.
Consumer Confidence Rises More than Expected, Index at 65.4 in April vs. 63.8 in March
Update on FINREG (Financial Regulation)
Protect your homes value and your right to affordable home financing.
The focus continues to be on the Dodd-Frank Bill.
With implementation of the Dodd-Frank Bill a couple of months away, much has to be done to repeal or at least modify language in the Bill. This Bill is another government power grab and will its unintended consequences will ad further pressure to the real estate market.
Get involved and let you elected officials know your concerns.
Already prepared template letters and contact info for your Congressman and Senator are available at: