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  • The NFIB Small Business Optimism Index remains historically high as sales and profits maintained strength in June.

    The NFIB Small Business Optimism Index remains historically high as sales and profits maintained strength in June. The Small Business Optimism Index hit 107.2 in June, down 0.6 from May, its sixth highest reading in survey history. "The first six months of the year have been very good to small business thanks to tax cuts, regulatory reform, and policies that help them grow," said NFIB President and CEO Juanita Duggan. Since December 2016, the Index has averaged lofty levels of 105.4, well above the 45-year average of 98 and just below the all-time high of 108.0 from July 1983. The biggest problem employers are now facing is finding qualified workers to fill positions.

    Job openings remained at near all-time highs in May as the labor markets continues to gain strength. The Bureau of Labor Statistics reports that there was 6.6 million job openings on the last business day of May, just below the series high of 6.8 million in April, according to its JOLTS (Job Openings and Labor Turnover Survey) report. The report is closely monitored by the members of the U.S. Federal Reserve.

    Mortgage delinquency rates have been edging lower as the economy and job markets strengthen. CoreLogic reports that the 30 days or more delinquency rate for April 2018 was 4.2%. In April 2017, 4.8% of mortgages were delinquent by at least 30 days or more including those in foreclosure. This represents a 0.6% decline in the overall delinquency rate compared with April 2017. CoreLogic says that delinquency rates are nearing historic lows, reflecting a long period of strict underwriting practices and improved economic conditions.

  • Mortgage rates edged lower over the past week and have now declined in three of the past four weeks.

    Mortgage rates edged lower over the past week and have now declined in three of the past four weeks. After a sharp run-up in the early part of 2018, mortgage rates have stabilized over the last three months, with only a modest uptick since March. Freddie Mac reports that the 30-year fixed-rate mortgage fell five basis points in the latest week to 4.57% with an average 0.50 in points and fees.

    Manufacturing activity in the Philadelphia region declined in June from May, though all the broad indicators remained positive. The June Philadelphia Manufacturing Index fell 15 points from May to 19.9 and below the 27 expected. The new orders index and general activity fell notably. Expectations for the next six months continued to moderate but remain positive overall. The survey went on to reveal that firms continued to report overall increases in employment.

    The National Association of Manufacturers released the results of the Manufacturers' Outlook Survey for the second quarter of 2018. The survey showed that 95.1% of manufacturers have positive outlooks for their companies, an all-time in the survey’s 20-year history following the enactment of the Tax Cuts and Jobs Act. Within the report it showed all-time highs for projected employment growth and capital spending.

  • Housing sentiment continued to strengthen in May, but high home prices complicate consumer purchase confidence, reports Fannie Mae.

    Housing sentiment continued to strengthen in May, but high home prices complicate consumer purchase confidence, reports Fannie Mae. Higher home prices are due in part to limited inventories of homes for sales on many markets across the nation. The Fannie Mae Home Purchase Sentiment Index (HPSI) rose 0.6 points in May to 92.3, reaching a new all-time survey high for the second consecutive month. The net share of respondents who reported that now is a good time to sell a home increased to 46% in May, and is now up 14 percentage points year over year. However, the net share of those surveyed said now is a good time to buy, decreased to 28%, showing little improvement in the past 12 months.

    Not much action in the U.S. capital markets today as the investing world sits on their hands awaiting next week's Fed decision and monetary policy statement. Currently, there is a 90% chance of a 0.25% hike to short-term Fed Funds Rate. The Federal Open Market Committee meeting begins Tuesday and ends Wednesday at 2:00 p.m. ET with the rate announcement and statement. The Fed will also release economic projections while Fed Chair Powell will hold a press conference at 2:30 p.m. ET.

  • Home prices continued to edge higher in March due in a large part to low inventories of homes for sale on the market.

    Home prices continued to edge higher in March due in a large part to low inventories of homes for sale on the market. The S&P Case-Shiller 20-City Home Price Index rose 6.8% from March 2017 to March 2018, matching the February gain. David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, said, "Months-supply, which combines inventory levels and sales, is currently at 3.8 months, lower than the levels of the 1990s, before the housing boom and bust. Until inventories increase faster than sales, or the economy slows significantly, home prices are likely to continue rising."

    Consumers assessments of the current conditions regarding the U.S. economy is hovering near a 17-year high with a focus on better business conditions. The May Consumer Confidence Index came in at 128.0 in May, just above the 127.5 expected. The Conference Board said that overall, confidence levels remain at historically strong levels and should continue to support solid consumer spending in the near-term, which would support solid economic growth.

    U.S. Stocks are lower to begin the holiday shortened week as political turmoil in Italy and Spain weigh on the equity markets. In addition, the on again off again summit between the U.S. and North Korea leads to uncertainty and the Stocks markets hate uncertainty. The closely watched Dow Industrial Average is down 400 points today. However, the average is up nearly 30% since the presidential election in late 2016.

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