Home Sales Down, Interests Rates Up
Advertising is typically an early target of corporate budget trimming when signs of slowing demand emerge, and the week’s economic data provided evidence for caution.
Existing-home sales fell for the fifth straight month in June, declining 5.4% from May and 14.2% from a year earlier, the National Association of Realtors reported.
Mortgage applications fell mid June, hitting their lowest point since 2000, according to Mortgage Bankers Association. The median sales price of existing homes was up 13.4% year over year to $416,000, an all-time high.
Economists increasingly expect the Federal Reserve, in its efforts to push down inflation, to raise rates enough to trigger a recession, with many worrying the central bank will go too far. Economists surveyed by The Wall Street Journal now put the chance of a recession sometime in the next 12 months at 49% in July.
U.S. wages are going up. But those steady gains have been wiped out by high prices.
Traders are in “full capitulation” mode as outlooks for global growth and profits are at all-time lows, according to the BofA's latest fund manager survey. Cash levels are the highest since 9.11.
Oil prices have slipped below the $100 a barrel mark, amid a roughly 20% sell-0ff since early June. Falling prices could disrupt the doom loop of rising inflation, rising interest rates, and rising
expectations of further Fed hikes that have crushed the stock market this year.
The European Central Bank raised interest rates mid-June by half a percentage point — returning the main deposit rate to zero – and announced it plans to buy the debt of weak European economies to protect them from the rate hike and bolster the euro amid high inflation and weakening economic growth.
In a sign the
United States’ tight labor market is beginning to slacken, the Labor Department reported mid-June that initial jobless claims increased by 7,000 week-over-week to 251,000, the highest level this year.
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