DOW 9000
Stocks jumped over 9000 on the Dow today on the great news of the housing market, up 188 points.
Bonds increased significantly in interest rates – bad news if this continues.
The Dollar and Gold both went sideways today.
Oil and gasoline jumped up in sympathy with stocks as they think the future is rosy and a recovery is just around the corner.
In the news today…..
Unemployment Claims – was 554,000 last week. The good news is that this is less than those 600,000 and 700,000 numbers we saw at the beginning of this year. The overall trend is down – and that’s good news. The bad news is that it is still high. The folks who tally this number also stated the number was not a good statistic because of what’s still happening in the auto industry. Who can you trust these days, if not the government statisticians???
The total people taking unemployment benefits FELL slightly as people fell off of the benefits (it only lasts so long folks), but the people on emergency, extended unemployment benefits continued to rise. All this equates to more “official” unemployment which is still going up. Remember, the FED predicts 10.1% unemployment by year end. However, with a bunch of people no longer getting unemployment benefits, and not being employed, the total number of people unemployed is much higher – in the 16 to 20% range. Not a nice picture. The point here is that you can’t fixate on the “official” unemployment number – it is purposely misleading so the government (any government of any party) doesn’t look so bad.
Existing Home Sales – rose last month. This is the 3rd month in a row that sale have risen. My personal rule is that when something happens 3 months in a row, it’s no longer a potential aberration, but it is real. So, the truth now is that existing home sale are increasing – and this is truly good news. But increasing existing home sales isn’t everything. Keep your eye on the home value – that’s what truly counts. Lower home prices continue to undermine those toxic securities being held by the big financial institutions around the world. Home prices must stabilize before those securities can start to have some stability in their value – and our financial institutions can have that same stability and non-bankrupting future.
The median price came in at $181,000, 15.4% lower than 12 months previously. However, the spectacular news is that the median price was UP 4% over the previous month. This is truly spectacular news. I temper my enthusiasm, and must wait for 3 months in a row of increasing (or stable) prices before I declare a bottom in home prices. Also, this is existing homes, and the statistics for new homes must be factored into any conclusion also.
Stocks above 9000 – and this was caused by the enthusiasm over the home sales report. I personally agree with the stock market on this one. Stocks are projecting 6 months ahead, and discounting a bright future. If there is any truth in these housing numbers, then stocks are moving in the right direction.
One cautionary note – there should be increasing foreclosures heading our way at the end of the year, and this could throw a web blanket on this party.
Here are the last numbers for today:
Dow Jones 30 Industrial – 9069 (up 188 points)
10 Year Treasury Bond – 3.71% (up 0.16%)
Euro – $1.4198
Gold – $955 (up $2)
Oil – $67.17 (up $1.76)
Gasoline $1.91 (up $0.07)