January 12, 2013 – Housing Market, Reverse Mortgages, Cape Cod Technology Council, Hurricane Sandy Relief
Chris is joined by frequent co-host of Slade Mortgage on this week’s Something More. They discuss the Cape Cod housing market, mortgage rates, and situations when one might use a reverse mortgage. Jenny Jordan of Hope for Hurricane Sandy Relief phones in to the show on the “something more” segment. She talks about fundraising for people affected by Hurricane Sandy on Staten Island and the Far Rockaways. The second hour of the show has guest Paula Hersey of Penguin Digital and the Cape Cod Technology Council. She discusses the work of the council as “inspiration, education, and innovation.”Read More
As the East Coast struggled to recover from Sandy, financial markets came back from their two-day hiatus down but not out. Despite some volatility on Thursday and Friday, domestic indices ended the week essentially flat. Meanwhile, a stronger U.S. dollar contributed to Friday’s decline of roughly $38 an ounce in the spot price of gold.
|Market/Index||2011 Close||Prior Week||As of 11/2||Week Change||YTD Change|
|Fed. Funds||.25%||.25%||.25%||0 bps||0 bps|
|10-year Treasuries||1.89%||1.78%||1.75%||-3 bps||-14 bps|
Equities data reflect price changes, not total return.
Last Week’s Headlines
- Estimates of the damage done by last week’s superstorm, including not only property damage but lost revenue from business activity, reached as high as $50 billion. Some economists warned that Sandy’s economic impact could cut as much as 0.5% from the nation’s gross domestic product in the fourth quarter, though rebuilding efforts also could add to GDP in subsequent quarters.
- The U.S. economy added 171,000 jobs in October and job growth in the previous two months was revised upward, according to the Bureau of Labor Statistics. However, the unemployment rate ticked up slightly from 7.8% to 7.9%, in part because more people once again sought to enter the labor force.
- There was more good news from the housing market as home prices continued to rise in August, though at a slightly slower pace than the month before. The 0.9% increase in the S&P/Case-Shiller 20-city index, which followed July’s 1.6% increase, put prices at their highest level since September 2010, and up 2% from August 2011.
- Consumers spent more in September, according to the Commerce Department, but they may have been dipping into their savings to do so. While spending was up 0.8%, the personal savings rates fell to 3.3% of income–the third straight month of declines in the savings rate. Meanwhile, personal incomes were up 0.4%, although they were essentially unchanged after accounting for taxes and inflation.
- U.S. manufacturing also saw some encouraging signs. New factory orders grew more during September–4.8%–than in any month in more than a year, according to the Commerce Department. Business productivity rose 1.9% in the third quarter–about the same pace as in Q2–and the number of hours worked was up 1.3%. Almost all of the gains came in the services sector rather than manufacturing, which has been hurt by reduced global demand. However, in October, the Institute for Supply Management’s index of manufacturing activity saw a second month of accelerating expansion, rising to 51.7% (anything above 50% represents growth).
Eye on the Week Ahead
Let the games begin: Financial markets are likely to begin assessing how the election results might affect the January 1 fiscal cliff and renewed debate over the debt ceiling. Also, both the European Central Bank and Bank of England will meet, and the Greek parliament will vote on fresh austerity and budget measures.
Key dates and data releases: U.S. services sector (11/5); balance of trade (11/8).
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