QUOTE OF THE WEEK... "Our greatest glory is not in neverfalling, but in rising every time we fall."--ConfuciusINFO THAT HITS US WHERE WE LIVE... Whatare rising now are asking prices for homes. A major Web real estateportal reports prices for homes listed there were up 3.8% in November versus ayear ago. This is the largest year-over-year gain since the housing downturnbegan. In addition, the listing prices for the three months endingin November were up 0.8% from the prior three months. And the good news waswidespread: annual gains were reported in 76 of the 100 largestmetros.Finally, asking price gains are now beating rent price gains inthe 25 largest rental markets. The Wall Street Journal reports five factors influencing rising home prices:housing affordability, with price-to-rent and price-to-income ratios favoringhome ownership in many markets; increased household formation; rising rents; adecrease in distressed sales; and record low inventories. The Fed'srecent Beige Book reported improving markets for single-family homes in 10 ofthe 12 Federal Reserve districts across the country. But one of thetwo exceptions still showed declining inventories and the other had been hurtby Hurricane Sandy. BUSINESS TIP OF THE WEEK... Sitting too long at a computer dulls yourmental sharpness. Take a break every hour or so and be active: take a 10-minutewalk, do a few sets of push-ups or sit-ups. Review of Last Week PARACHUTES, ANYONE?... It's hard for investors to get enthusiasticabout buying stocks as they wait for the politicians to agree on how to save usfrom going over the fiscal cliff on January 1. Maybe Washington will just issueeveryone parachutes to soften the landing. The political deadlock,along with good and bad economic data, left the Dow up a tad for the week, theS&P 500 virtually flat, and the tech-heavy Nasdaq off just a bit. Theweek began disappointingly, with the ISM Manufacturing index dipping below 50for November, indicating contraction. But, hey, the November ISM Services index rose nicely to a 54.7growth reading and Q3 Productivity was up at a 2.9% annual rate. Best ofall, Friday's November employment report delivered a better thanexpected 146,000 new jobs and a drop to 7.7% in the unemployment rate. Unfortunately,the prior reading was revised down from 171,000 to 138,000 new jobs. Anothernegative was the big drop from 82.7 to 74.5 in University of Michigan ConsumerSentiment. For the week, the Dow ended up 1.0%, to 13155; the S&P 500 was up0.1%, to 1418; and the Nasdaq was down 1.1%, to 2978. Mixed economic reports plus the fiscal cliff stalemate contributed tolittle price movement in bonds. The FNMA 3.5% bond we watch ended the week down.01, at $106.23. National average fixed mortgage rates stayed at ornear record lows as the Fed continued its program to buy $40 billion a month ofmortgage bonds to keep prices up and rates down. The MortgageBankers Association reported demand for purchase loans even for the week. DID YOU KNOW?... Bush Tax Cuts refers to the reduced income andlong-term capital gains taxes, marriage penalty reduction, expansion of thechild tax credit, and lowered maximum gift and estate tax exemptions enactedunder President George W. Bush. This Week’s Forecast Important news about the consumer's role in the recovery comesThursday. OverallNovember Retail Sales are expected back ingrowth territory from last month's dip. But Retail Sales excluding autos arepredicted to be flat. Wholesale PPI and consumer CPI inflation numbersare forecast to stay within Fed guidelines. The Week’s EconomicIndicator Calendar |
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