Springing Eternal
The holiday-shortened trading week got off to a positive and hopeful start with bullish news regarding consumer confidence. US consumer data showed a surprising jump of 54.9 percent versus an estimate for a 42.6 percent climb. The Conference Board data for May – the largest boost in confidence in about six years – helped spur a rally in the S&P on the basis that recovery may be just around the corner. With numbers like this, it is easy to see why some investors may be eager to suggest that the worst is behind us.
Bankruptcy may be looming for major automobile manufacturer General Motors, but the number of consumers in the US planning to buy a car rose to higher levels. Deep discounts from manufacturers and retailers – or at least the perception of them – may have contributed to the boost.
Housing data will also be in the spotlight this week. The housing sector may not be out of the woods, but the worst of the fallout may be in the economic rearview mirror as negative results may be largely expected or anticipated. Economists are suggesting that prices – which are at or near 2002 levels – may continue to slide through the end of the year, but sales volume may increase as bargain hunters look to scoop up foreclosures. Indeed, today’s existing home sales number came in larger than market expectations, posting a 2.9 percent increase, according to the National Association of Realtors data.
However, mortgage applications have fallen as home loan rates moved 0.12 percent higher, and refinancing requests have also declined. Rates may be near record lows, but looming issues surrounding credit and the rate of unemployment or threat of layoffs may still prove hurdles to prospective homebuyers.
As the United States moves through the second quarter, many economists are imagining that activity will continue to decline, but they are also looking to the light on the horizon. In a recent survey, they point to signs of recovery and suggest that the second half of 2009 will be an improvement, perhaps even positive. Looking at what they perceive as signs of stability, nearly 75 percent of the panel surveyed felt the third quarter will mark the end of the recession.
Past Performance is Not Indicative of Future Results.
Past Performance is Not Indicative of Future Results.
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