Days after China threw the biggest scare into Wall Street in years, U.S. stocks have come back and ended Friday on a placid note that suggested the worst may be over for now. Even so, investors are buckling their seat belts for more turbulence ahead. The DOW closed the week at 16,643.01 capping a week that saw stomach-churning losses and gains of around 600 points per day. The slow down began mostly over China, the world’s second biggest economy. But stocks soared back mid-week cutting the losses nearly in half, in a rally attributed to bargain hunting, signs the Federal Reserve may hold off raising interest rates this fall and a new report that said the U.S. economy is growing at a more robust rate than previously believe. Still, concerns that triggered the sell-off remain: Slumping oil prices, a slowing Chinese economy, weak corporate earnings forecasts, and an uncertainty over interest rates. That means there’s likely to be more market volatility ahead… something that history backs up. In the past, the month of September has been the worst for stocks (All this was in this past week’s S.A. Express News).
U.S. consumer confidence rebounded in August. It was the best showing since January. Analysts said the jump in consumer confidence should support stronger consumer spending in coming months. Let me remind folks again that 70 percent of our economy is based on consumer spending. Not China’s economic woes.
Mortgage rates tend to drop when the stock market falls. Average 30-year U.S. mortgage rates dropped last week to their lowest levels since May to 3.84 percent, according to Freddie Mac.
The National Association of Realtors said its seasonally adjusted “pending home sales index” rose 0.5 percent to 110.9 last month which marked a slight recovery from June when it fell to 110.04. So, at least all is well on the home front. Mortgage rates are still low, and home sales are still on track to be better.
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