Existing Home Sales Increase
Stocks dropped 242 points today as the financial bad news keeps building. Fannie Mae and Freddie Mac are weak. Lehman Bros is weak. Another small bank fell over the weekend. Bonds gained back all of its losses from last week as a safe haven (as interest rates fell).
Gold, the Dollar, Oil and gasoline all went sideways.
In the news today…..
The sales of existing houses rose 3.1% last month. This is great news. However, the number of houses for sale also rose, and is currently at 11.3 months worth – tying the highest ever. This is terrible news. 40% of houses on the market come from foreclosures. The median price of houses continued to fall.
Think about this a little. The number of existing houses sold rose – now that’s because there are so many true bargains on the market today in certain markets – these are houses that cash flow as rentals. And what are the people buying these houses doing? They are either renting them out, or selling them, or both. So, the large number of sales is also feeding into the number to be sold. We are far from the bottom of this market.
The IMF is cutting its idea of the world’s future GDP growth. As the US economic slowdown spills over into the rest of the world, the IMF is now seeing the impact. The US is still the largest market around for goods produced, and the impact of a US slowdown is great.
Here are Today’s numbers:
Dow Jones 30 Industrial – 11,386 (down 242 points)
10 Year Treasury Bond – 3.79% (down 0.08%)
Euro – $1.4753
Gold – $826 (down $8)
Oil – $115.11 (down $0.34)
Gasoline – $2.88 (down $0.18)