NEW YORK (Reuters) – U.S. equities tumbled on Monday, with the S&P 500 confirming it is in a bear market, as fears grow that the expected aggressive interest rate hikes by the Federal Reserve would push the economy into a recession.
The benchmark S&P index has fallen for four straight days, with the index now down more than 20% from its most recent record closing high to confirm a bear market began on Jan. 3, according to a commonly used definition.
All the major S&P sectors were sharply lower, with only about 10 components of the S&P 500 in positive territory on the day. Markets have been under pressure this year as climbing prices, including a jump in oil prices due in part to the war in Ukraine, have put the Fed on track to take strong actions to tighten its monetary policy, such as interest rate hike.
The Fed is scheduled to make its next policy announcement on Wednesday and investors will be highly focused on any clues for how aggressive the central bank intends to be in raising rates.
A hotter-than-expected consumer price index (CPI) reading on Friday prompted traders to price in a total of 175 basis point (bps) in interest rate hikes by September.
Sales of newly built homes sank to the slowest rate since the start of the Covid pandemic.
The median price of a new home sold in April was $450,600, an increase of nearly 20% from the year before.
Slower sales caused the inventory of newly built homes to jump sharply as well to a nine-month supply. A six-month supply is generally considered balanced between buyer and seller.
Sales of newly built homes dropped 16.6% in April from March, far more than expected, and were down 26.9% from April 2021, according to the U.S. Census.
The annualized rate came in at 591,000 units, seasonally adjusted. Analysts had been expecting 750,000. March’s read was also revised lower.
That is the slowest sales pace since April 2020, when everything shut down at the start of the Covid pandemic. Sales surged quickly after that, as Americans sought bigger homes with outdoor spaces for quarantining.
A recession is a macroeconomic term that refers to a significant decline in general economic activity in a designated region. It had been typically recognized as two consecutive quarters of economic decline, as reflected by GDP in conjunction with monthly indicators such as a rise in unemployment. However, the National Bureau of Economic Research (NBER), which officially declares recessions, says the two consecutive quarters of decline in real GDP are not how it is defined anymore.
World’s richest person will offer $54.20 per share in cash
Tesla executive is one of Twitter’s most-watched firebrands.
Billionaire entrepreneur Elon Musk offered to take Twitter Inc. private in a deal valued at $43 billion, lambasting company management and saying he’s the person who can unlock the “extraordinary potential” of a communication platform used daily by more than 200 million people.The world’s richest person said he’ll pay $54.20 per share in cash, 38% above the price on April 1, the last trading day before Musk went public with his stake. The social media company’s shares were little changed at $45.81 in New York on Thursday, a sign there’s skepticism that one of the platform’s most outspoken users will succeed in his takeover attempt.Musk, 50, announced the proposed deal in a filing with the U.S. Securities and Exchange Commission on Thursday, after turning down the chance to take a board seat at the company. Musk, who also controls Tesla Inc., first disclosed a stake of about 9% on April 4, making him the largest individual investor. Tesla shares fell about 3% on concern that the attempt to acquire Twitter will be a distraction for Musk.
The US Dollar Index notched a very strong April amid turmoil in Europe and Asia
Traditional asset class relationships have bucked trends in 2022
Any pullback in commodities is likely a buying opportunity as the year progresses
The US dollar had one of its best months of the last decade in April. The trade-weighted dollar index measures the greenback versus six major currencies. The euro is the biggest driver, making up 58% of the ICE futures US Dollar Index (DXY). The yen, British pound, and Canadian dollar are other components. Traders can easily play the USD via the popular Invesco DB US Dollar Index Bullish ETF (NYSE:UUP).
USD Surges in 2022 Amid A Volatile Macro Backdrop
Our Global Cross Asset Market Monitor report sent each Monday morning reviews where the macro landscape stands before a busy week. With the DXY hitting its highest level since December 2002 recently, investors are clearly bracing for relative strength in the US currency. The Euro area continues to endure skyrocketing producer and consumer prices while Japan faces its own issues with supply constraints related to China’s zero-COVID lockdown measures. The relative bright spot is the CADUSD – the Loonie is still more than 10% above its 2016 and 2020 lows vs the USD
Rising home prices mean today’s mortgage holders also have record levels of equity.
With interest rates poised to rise, many homeowners may want to tap those funds.
But just because you can, that does not mean you should, experts say.
Record increases in home prices are also pushing up the amount of equity people have in their abodes. For many Americans, that means they can borrow more against what is often their biggest asset.However, financial experts caution you should think carefully before making such a move.
The average mortgage holder currently has about $185,000 in home equity to tap, which is the amount they can access while still retaining a 20% stake, according to mortgage research from Black Knight.
Fed Chairman Jerome Powell said Wednesday he still sees interest rate hikes ahead though he noted the “implications for the U.S. economy are highly uncertain” from the Ukraine war.
Powell called the labor market “extremely tight” and said inflation has risen well above the Fed’s 2% target.
His remarks are part of mandatory appearances this week before House and Senate committees in Congress.
Federal Reserve Chairman Jerome Powell still sees interest rate hikes coming, but noted Wednesday that the Russia-Ukraine war has injected uncertainty into the outlook. Powell said he sees a series of quarter-percentage-point increases coming, though he left open the possibility of moving more aggressively should inflation persist. In remarks prepared for dual appearances this week before House and Senate committees in Congress, the central bank chief acknowledged the “tremendous hardship” the Russian invasion of Ukraine is causing. “The implications for the U.S. economy are highly uncertain, and we will be monitoring the situation closely,” Powell said.
The average rate on the popular 30-year fixed mortgage had risen close to a full percentage point from the start of this year up until last Friday, when it hit 4.18%, according to Mortgage News Daily.
It hit 3.9% on Tuesday.
This will give homebuyers more purchasing power as the historically busy spring season kicks off. It will also keep record-high home prices continuing on their run higher.
Mortgage rates are sinking as markets contend with the ramifications of Russia’s attack on Ukraine, and that means home prices are likely to continue surging.The average rate on the popular 30-year fixed mortgage had risen close to a full percentage point from the start of this year up until last Friday, when it hit 4.18%, according to Mortgage News Daily. It then fell to 4.04% Monday and 3.9% on Tuesday. That is the largest two-day drop since March 2020, the start of the pandemic.
SINGAPORE (Reuters) – Oil jumped to a seven-year high, safe-havens rallied and U.S. stock futures dived on Tuesday as Europe’s eastern flank stood on the brink of war after Russian President Vladimir Putin ordered troops into breakaway regions of eastern Ukraine.
Brent crude futures rose 1.6% to $96.94, just off their overnight seven-year high. S&P 500 futures fell 1.5% and Nasdaq futures fell 2.2%. Asian stocks were also down over half a percent, while Japan’s Nikkei skidded sharply.
The Russian rouble briefly touched an 18-month low in early Asia trade on Tuesday, after Russia’s MOEX equity index had fallen 10.5% the day before.
Spot gold, in contrast, hit a new six-month top of $1,911.56. [GOL/]
Source: National Assn. of Homebuilders Lumber prices are climbing once again, adding thousands of dollars to the cost of a new home. Builders and consumers thought relief had arrived when the price of lumber started to fall late last year, after soaring to record highs earlier in the year. But starting in December 2021, lumber prices again started to increase. Lumber prices are about triple their average pre-pandemic levels, reports Random Lengths, a lumber industry news site. That’s adding more than $18,600 to the price of a newly built home, the National Association of Home Builders reports.
California’s plan aims to pick up rising viral transmission early and rapidly sequence new variants to determine whether vaccines and therapeutics are still effective.
The state also aims to rapidly deploy additional testing and hospital staff to regions impacted by an outbreak.
The state could reimpose mask mandates depending on the dominant variant and how much disruption it’s causing.
California on Thursday laid out a plan that manages Covid as a permanent aspect of life, anticipating future surges and new variants that may require temporary public health measures such as facemasks depending on how much the virus is disrupting economic and social activity.
(Reuters) – The interest rate on the most popular U.S. home loan surged by the most in nearly two years last week, shooting above the 4% level for the first time since 2019 as financial markets anticipate that the Federal Reserve will respond to the highest inflation in a generation with an aggressive run of rate hikes.
The Mortgage Bankers Association on Wednesday said its weekly measure of the average contract rate on a 30-year, fixed-rate mortgage climbed to 4.05% in the week ended Feb. 11 from 3.83% a week earlier. That was the highest since October 2019 and the largest weekly increase since March 2020 when the onset of the coronavirus pandemic was roiling financial markets.