[1]

[2]

Of Note:

• [3] Consumer Confidence-came in at 50.4 one of the lowest readings and some economists are surprised since, in their words, “the expansion of the economy is underway”, meaning we are not in a recession. I would argue that most individuals are not feeling the positive effects of an expansion. Consider that overall real wages have remained stagnant in the last 30 years and that prices for many essential items have increased over that time, not the least of which is the price of a gallon of gasoline. Add to that the negative effects on net worth that lower real estate prices have produced and I’m not so sure things are as rosy on Main Street as the economists and Wall Street gurus would like. I’m still a believer that we have relied on consumer credit as a fix all for too many years and now we’re feeling the pain when consumers can’t keep up with their debt load. We’ll see how all this plays out over the next few years.

• [4] New Homes Sales -512,000 units sold representing a 2.5% monthly decline and a 40% year on year decline. New Home prices were down 5.1% to an average of $231,000.

• FOMC left rates unchanged with the [5] target funds rate at 2% and the discount rate at 2.25%.

• [6] Durable Goods Orders came in flat for May.

• [7] [15] [8] MBA Purchase Applications came in at 333.4 representing a 7.4% drop after last weeks drop of 4.3%.

• [9] Jobless Claims , came in slightly higher at 384k.

• [10] GDP-final was revised up to 1% basically indicating that we’ve dodged a recession……hope they are right.

• [11] Exisiting Home Sales –rose 2% to 4.99M from April, but is still 15.9% lower than last year. The number was slightly encouraging but keep in mind that this is the selling season.

• [12] [27] Consumer Sentiment, came in with the third lowest reading since 1952, indicating that while we may not officially be in a recession, it feels like a recession for the average consumer.

• [13] Personal Income and Outlays, got a boost from the rebate checks and came in at 1.9%…..of course all of that is going into our gas tanks, lol!

• Bonds…2 year 2.64%, 5 yr. 3.35% and the 10 yr. 3.97%.

• Crude oil closed at $140.46 per barrel.

Rough week again! The Dow ended the week at 11,350 with the price of oil front and center amid inflation worries.
For the record, I’m actually an optimist but I also think you have to put the rose colored glasses aside every now and then and sober up to the fact that it’s rough out there!  Our net worths have been significantly eroded by falling prices both in real estate and the stock market.   Add to that the prices at the pump and it can look pretty grim.

On the positive side I do think this market represents a huge buying opportunity!  Remember the old adage “buy low, sell high”?  Most of us panic when things are low because we think they will go lower.  So as easy as it is to say it, it’s much harder to take action and buy when prices are low.

On that note , have a great week!

The Economic Week Ahead:

• [14] ISM Manufacturing Index, Motor Vehicle Sales(Tuesday)

• [7] [15] [16] [17] [8] MBA Purchase Applications, [19] Challenger Job Cut Report, [20] Monster Employment Index,(Wednesday)

• [21] Jobless Claims, Employment Situation (Thursday)

• 4th of July Holiday!!!(Friday)

I’ll post the July 7th week as well as there may not be as much to talk about next week:

• [22] Pending Homes Index (Tuesday)

• [8] MBA Purchase Applications, (Wednesday)

• [9] Jobless Claims , [25] Chain Store Sales, Bank of England (BOE) Announcement(Thursday)

• [26] International Trade, [12] [27] Consumer Sentiment(Friday)