Stock markets down for a second straight week – Stock markets were down significantly in September. They soared in October and November on strong corporate profits, and signs of moderating inflation. In the beginning of December the Dow was down just 5% for the year. Over the last two weeks markets have given up some of those October and November gains. This week the Fed increased its key interest rate by 1/2%, a move that was largely expected. The November Consumer Price Index reading came in at 7.1%, it’s lowest level of the year. CPI, the broadest measure of inflation peaked at 9:2% in June and has worked its way down steadily. That was good news and stocks soared after the CPI release. Thursday, comments from the Fed indicated that they still fell the economy and job market are not weakening as they had hoped, and investors sold off stocks fearing the Fed’s target interest rate may get higher than previously thought. On Friday, preliminary retail sales reports from retailers suggested that retail sales may be lower than expected. The Dow Jones Industrial Average closed the week at 32,920.46, down 1.7% from 33,476.46 last week. It is down 9.4% year-to-date. The S&P 500 closed the week at 3,852.36, down 2.1% from 3,934.38 last week. The S&P is down 19.2% year-to-date. The NASDAQ closed the week at 10,705.41, down 2.7% from 11,004.62 last week. It is down 31.6% year-to-date.
U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 3.48%, down from 3.51% last week. The 30-year treasury bond yield ended the week at 3.53%, down from 3.56% last week. We watch bond yields because mortgage rates often follow treasury bond yields.
Mortgage rates lower for the forth consecutive week – The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of December 15, 2022, were as follows: The 30-year fixed mortgage rate was 6.31%, down slightly from 6.33% last week. The 15-year fixed was 5.54% down from 5.67% last week.
California existing-home sales – The California Association of Realtors reported that existing-home sales totaled 237,740, on a seasonally adjusted annualized basis in November, down 13.2% month-over-month from October, and down 47.7% year-over-year from November 2021, when 454,450 homes sold on an annualized basis. The statewide median price paid for a home in November was $777,500, down 3% from $801,190 in October, and down 0.6% from $782,480 in November 2021. There was a 3.3-month supply of homes for sale in November, up from a 1.5-month supply one year ago.