Luxury Real Estate Blog

Economic update for the week ending April 17, 2021

Apr 18, 2021 — Tina Lucarelli, Rodeo Realty

Stocks continued their unprecedented rise again this week - A surge in consumer spending, increasing corporate profits, and inflation all point to the economy recovering much quicker than expected. That added to the effects of the nearly $2 trillion of stimulus that will be disbursed over the next 24 months, and possibly a giant infrastructure package has investors bullish on the economy. The Dow Jones Industrial Average topped 34,000 for the first time in history. It closed the week at 34,200.67, up 1.2% from 33,800.60 last week. It is up 11.6% year-to-date. The S&P 500 closed the week at 4,185.87, up 1.4% from 4,128.80 last week. It is up 11.3% year-to-date. The NASDAQ closed the week at 14,052.34, up 1.1% from 13,900.19 last week. It is up 8.6% year-to-date.

Economic Update For Week Ending April 3, 2021

Apr 02, 2021 — Tina Lucarelli, Rodeo Realty

U.S. employers added 916,000 jobs in March - The Department of Labor and Statics reported that 916,000 net new jobs were added in March. That number exceeded Dow Jones analysts’ expectations of 675,000 new jobs. The unemployment rate declined to 6% in March, down from 6.2%, in February.  Stocks up again this week – The S&P broke 4,000 for the first time in history – This week’s financial news moved all markets higher. Consumer confidence hit the highest point since the start of the pandemic. Job growth has picked up at a robust rate with almost one million new jobs added in March. Investors feel that because of the trillions of dollars in stimulus, and a potential $2 trillion infrastructure plan, the economy will remain on a trajectory of recovery from the harsh effects of the pandemic. The speed of the rate of vaccinations has also allowed much of the country to relax restrictions, adding to business optimism. 

Economic Update For Week Ending March 27, 2021

Mar 26, 2021 — Tina Lucarelli, Rodeo Realty

Stock markets – Stocks rallied this week after Treasury Secretary, Janet Yellen, and Federal Reserve Chairman, Jarome Powell testified in congress. They suggested that inflation fears are overblown, and not a serious threat. This pushed interest rates down for the first time in several weeks. The U.S. has also seen a dramatic decrease in COVID-19 cases, and a ramping up of vaccinations over the last several weeks. Conversely Europe and much of South America have seen a rise in cases. They are instituting a new round of restrictions that will impact their economies. That could impact corporate sales to those countries.

Economic Update For Week Ending, March 20, 2021

Mar 22, 2021 — Tina Lucarelli, Rodeo Realty

Stock markets this week - Stock markets gave up some profits at the end of the week after hitting record highs on Wednesday. At one point the Dow went over 33,000 for the first time ever before dropping back. The Dow Jones Industrial Average closed the week at 32,697.97, down 0.5% from 32,778.64 last week. It is up 6.5% year-to-date.  The S&P 500 closed the week at 3,913.10, down 0.2% from 3,943.34 last week. It is up 4.2% year-to-date.  The NASDAQ closed the week at 13,215.24, down 0.8% from 13,319.86 last week. It is up 2.6% year-to-date. U.S. Treasury bond yields - The 10-year treasury bond closed the week yielding 1.74%, up from 1.64% last week. The 30-year treasury bond yield ended the week at 2.45%, up from 2.40% last week. We watch bond yields because mortgage rates often follow treasury bond yields. 

Economic update for the week ending March 13, 2021

Mar 12, 2021 — Tina Lucarelli, Rodeo Realty

1.9 Trillion stimulus plan becomes law - On Thursday President Biden signed the American Rescue Plan Act. It’s a $1.9 Trillion stimulus plan that includes direct payments of $1,400 for individuals making up to $75,000 a year, and $2,800 for joint tax-filers making up to $150,000 a year. It phases out at $80,000 and $160,000 respectively. Pandemic federal unemployment assistance of an additional $300 per week was extended to September 6, 2021. The child tax credit is expanded to $3,600 for children under six years old, and $3,000 for children six to eighteen years old. Previously the child tax credit was $2,000 per child. There is also an additional $7 Billion for another round of paycheck protection loans, and $15 Billion for emergency injury disaster EIDL loans for businesses. It provides $21.25 Billion for local governments to provide rental assistance for lower income renters. There is also $10 Billion to fund for mortgage assistance for lower income homeowners. This accounts for just a small percentage of the $1.9 Trillion. It’s by far the largest stimulus plan ever enacted. While investors expect this to supercharge the economy, they also fear higher inflation which is causing interest rates to rise. 

Economic Update For Week Ending March 6, 2021

Mar 06, 2021 — Tina Lucarelli, Rodeo Realty

U.S. employers added 379,000 jobs in February - The Department of Labor and Statics reported that 379,000 net new jobs were added in January. That’s a healthy turnaround from January when the economy gained just 49,000 jobs. The figure also stunned analysts who expected 210,000 new jobs due to a rapid drop in COVID cases that has allowed more of the economy to re-open. Most of the gains came from the hospitality and leisure sector which saw an increase of 355,000 jobs as employers re-hired workers upon re-opening. Of those 355,000 hospitality and leisure workers, 286,000 work in bars and restaurants, 36,000 in hotels, and 33,000 in gambling and recreation businesses. Despite the gains, the hospitality and leisure sector still has 3.5 million fewer workers than before the pandemic. The unemployment rate in January was 6.2%, down from 6.3% in January.  

Economic Update for Week Ending February 27, 2021

Feb 27, 2021 — Tina Lucarelli, Rodeo Realty

Courtesy of Tina Lucarrelli of Rodeo Realty STUDIO CITY, CA - Stock markets dropped on fears of higher interest rates – As the economy appears to be recovering quicker than expected according to data and developments that are very positive, rising interest rates became a concern over the last two weeks. Stock markets reached record highs two weeks ago on news that COVID-19 cases were falling, the pace of vaccines had increased, retail sales rose sharply, corporate profits were strong, an unprecedented amount of additional stimulus will be added to the economy in the coming months, and the economy is finally beginning to re-open at a quicker pace than we have seen since the start of the pandemic. Unfortunately, all that optimism also has increased the risk of higher inflation and has lowered the demand for U.S. Treasury bonds. Treasury bonds pay low yields but are attractive when investors want to park money at low risk. Bond yields fell sharply from the start of the pandemic as investors rushed to safety, which lowered yields. Bond yields directly affect lending rates on every type of loan. Bond yields have increased to their highest level since last April, which has caused interest rates on all types of loans to increase. Higher borrowing costs lower profits. With investors uncertain about how much higher interest rates will rose, stock prices have dropped. 

Economic Update For The Week Ending February 20, 2021

Feb 20, 2021 — Tina Lucarelli, Rodeo Realty

Stock markets ended the week slightly lower on inflation fears - U.S. retail sales jumped 5.3% in January. This unexpected jump was credited mostly to consumers spending stimulus checks, as well as a general feeling that the worst of COVID is behind us. On the other hand, investor’s confidence in the economy, and a tremendous amount of stimulus money being added to the economy, have promoted fears of inflation. Those inflation fears and economic optimism have caused bond yields to increase. Higher bond yields lead to higher interest rates which increase borrowing costs for businesses, consumers, governments, and mortgages. This held stock markets from jumping again this week despite strong corporate earnings, a drop in COVID cases, and strong data from just about all sectors.  The Dow Jones Industrial Average closed the week at 31,494.32, up 0.1% from 31,458.40 last week. It is up 2.9% year-to-date.  The S&P 500 closed the week at 3,906.71, down 0.7% from 3,934.83 last week. It is up 4.0% year-to-date. The NASDAQ closed the week at 13,874.36, down 1.6% from 14,094.47 last week. It is up 7.7% year-to-date. U.S. Treasury bond yields - The 10-year treasury bond closed the week yielding 1.34%, up from 1.20% last week. The 30-year treasury bond yield ended the week at 2.14%, up from 2.01% last week. We watch bond yields because mortgage rates often follow treasury bond yields. 

Economic Update For Week Ending February 13, 2021.

Feb 13, 2021 — Tina Lucarelli, Rodeo Realty

Stock markets finished the week higher - Stock markets ended the week higher again as investors celebrated positive news and data. Higher than expected year-end corporate profits were reported. There has been a drastic drop in COVID-19 cases nationwide. Vaccine distribution has increased, and it was announced that almost 50 million doses have been administered. The Biden Administration announced the purchase of an additional 200 million vaccine doses. Another $1-$1.9 trillion in stimulus appears to be all but certain to pass leaving investors bullish on the economic prospects for 2021. 
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