The biggest story in the financial markets and around the globe is the ongoing US/China trade negotiations.
At the moment, there is no resolution and it appears there will be no resolution for at least several weeks as the US and China are not expected to talk again until the G-20 Summit June 28-29.
The uncertainty surrounding the talks helped home loan rates improve this week, and are at lows seen in January 2018.
The US, China and the entire globe would benefit from a deal and should it happen, Stocks will likely recover all of their recent losses and then some. At the same time, should the story drag on and escalate as higher tariffs are instituted — it would have a negative effect on global economies and Stocks may suffer as home loan rates improve further.
Looking at the US economy, it continues to do very well. Walmart posted incredibly strong corporate earnings this past week. Seeing they have $500B in annual sales — if Walmart is doing well, the US economy is doing well.
In housing news, April Housing Starts and Building Permits came in higher than expectations, providing further evidence of confidence in the sector.
Bottom line: The backdrop to housing could not be much better. The economy is strong and home loan rates are historically low. Today presents an incredible window to consider buying or refinancing a home.
With little major economic data and the end of earnings season in the upcoming week, all attention will be focused on the aforementioned US/China trade negotiations.
The week will be holiday-shortened with the bond markets closing early at 2pm ET on Friday heading into the unofficial kickoff of summer, Memorial Day weekend. The stock markets will undergo a full session on Friday.
This coming week, the markets will see readings on New and Existing Home Sales as well as Durable Orders, which are items that have a lifespan over 4 years.
The Minutes from the May 1 Fed meeting will be released on Wednesday afternoon at 2:00 p.m. ET, and could always carry a surprise comment and thereby surprise reaction.
Reports to watch:
- Existing Home Sales will be released on Tuesday followed by New Home Sales on Thursday.
- Weekly Initial Jobless Claims will also be released on Thursday, with Durable Orders on Friday.