Financial worries knock Toronto stocks lower
· TSX -158.33pts (Reuters)prompted by weak financials, as worries over growing fallout from the credit crisis rattled investor confidence. Home-grown anxiety also weighed on the large financial sector as the major Canadian banks are set to report quarterly results this week.
· Dow -241.81pts In New York, stocks fell sharply on credit concerns, while global growth worries stung big technology and industrial companies.
· Dollar -.21c to $95.16US A negative tone in North American equity markets hurt the Canadian dollar, as financials sold off on both sides of the border on credit market fears, and the heavyweight energy sector of the Toronto Stock Exchange fell as oil prices fluctuated
· Oil +$.52to $115.11US per barrel
· Gold -$7.80 to $819.90US per ounce
Data on gross domestic product for the second quarter will be released on Friday. That will also be the last major piece of data before the Bank of Canada makes its Sept. 3 rate announcement.
Existing U.S. home sales up in July
MARY ANN CHASTAIN, THE ASSOCIATED PRESS
The Associated Press
The listing agent has boldly stated a change in the sales price to attract buyers to this home in a neighborhood in Columbia, S.C. Monday Aug. 25, 2008. Sales of existing homes rose 3.1 percent in July, surpassing expectations, as buyers snapped up deeply discounted properties in parts of the country hit hardest by the housing bust. (AP Photo/Mary Ann Chastain)
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Deeply-discounted properties being snapped up in parts of the country hit hardest by the housing bust
August 26, 2008 Alan Zibel The Associated PressSales of existing homes in the United States rose 3.1 per cent in July, easily beating Wall Street's expectations, as buyers snapped up deeply discounted properties in parts of the country hit hardest by the housing bust.
However, the number of unsold properties hit an all-time high, the latest indication that the worst housing market slump in decades is far from over.
The National Association of Realtors reported yesterday that sales rose to a seasonally adjusted annual rate of five million units. Sales had been expected to rise by only 1.6 per cent, according to economists surveyed by Thomson/IFR.
Home sales were 13.2 per cent lower than a year ago and prices were down dramatically. The median price for a home sold in July dropped to $212,000 US, down by 7.1 per cent a year ago.
Despite the third monthly sales jump this year, the number of unsold single-family homes and condominiums rose to 4.67 million, the highest number since 1968, when the Realtors group started tracking the data.
That represented a 11.2 month supply at the July sales pace, matching the all-time high set in April.
Sales were up in all regions of the country except the South, which posted a 0.5 per cent decline. Sales rose by 5.9 per cent in the Northeast, 0.9 per cent in the Midwest and 9.7 per cent in the West.
Analysts say that until the inventory level is reduced to more normal levels, the housing slump is likely to persist. The inventory level is being driven higher by a massive wave of mortgage foreclosures.
Despite the rise in sales, Lawrence Yun, the Realtors' chief economist, was reluctant to conclude that the U.S. housing market has hit bottom.
While buyers are pouncing on lower prices -- especially in places like California, Florida and Nevada -- sales are sluggish in formerly stable states like Texas.
"People are responding to lower prices,'' Yun said, but there is "too much uncertainty'' about the housing market's future to mark a definite bottom.
One key unknown is the ability of mortgage finance companies Fannie Mae and Freddie Mac to supply money for loans. The two government-sponsored companies have cut back the availability of mortgages significantly as they cope with mounting losses from foreclosures and officials ponder whether to shore up the two struggling companies.
Tuesday, August 26, 2008
Thursday, August 21, 2008
Financial Update
TSX get big lift from resource shares
· TSX +286.29pts its highest advance in 3 weeks, as investors snapped up energy stocks after U.S. inventory data showed a bigger than expected drawdown of gasoline stocks last week.(Reuters)
· Dow +68.88pts as the financial sector improved despite mounting worry and a growing conviction that the U.S. government will have to bail out government sponsored mortgage enterprises Freddie Mac and Fannie Mae.
· Dollar .02c to $94.23US
· Oil $.45to $114.98US per barrel as traders shrugged off a massive increase in U.S. crude inventories and a stronger U.S. dollar and focused on possible supply threats.
· Gold -$.80 to $810.30US per ounce
Weakness in Canadian economy helping homebuyers
Financial Post Garry Marr, Canwest News Service There is some good news in the falling housing market, affordability is improving.
Desjardins Economic Studies says that after eight years of rising prices, housing costs are going down. "For the second quarter in a row we have had an increase in affordability," said Hélène Bégin, senior economist with Desjardins.
However, she warned consumers should not get too excited about the market conditions because affordability is still very close to the all-time low reached in 1990.
The Desjardins Affordability Index is calculated by determining the ratio between average household disposable income and the income needed to obtain a mortgage on an average-priced home, known as the qualifying income.
The report from Desjardins said its affordability index climbed to 110.7 last quarter after dropping close to 100 at the end of 2007. In the early 1990s, the affordability index was as low as 93.6.
Desjardins says that affordability has increased by about 10% in the past two quarters because of falling home prices and lower mortgage rates.
The Canadian Real Estate Association said last week that the average price of a home sold in the country's major markets was $327,020, a 3.6% increase from a year ago. It was the second consecutive month prices had dropped on a year-over year basis.
Statistics Canada also said last month new homes prices grew only by 3.5% in June from a year earlier. It was the slowest rate of growth since March, 2002.
Desjardins noted that in the first half of the year, existing home prices rose by 4.4% compared to 10% a year earlier. The posted rate on a one-year mortgage also fell from 7.25% in March to 6.3% by the end of June. The posted rate on a five-year mortgage fell from 7.15% to 7.1% during the same period.
"House prices are just not going up as strongly as before and in some places in Western Canada, like Calgary, we have had some price drops. With the kind of return we have in Calgary, it has a big impact on affordability," said Ms. Bégin.
Prices in Calgary fell 7.8% in July from a year earlier, according to CREA.
They were off 5.8% in Edmonton during the same period. Desjardins says affordability in Calgary improved by 7.5% over the last three months.
Even with the improved conditions, affordability is still off almost 30% from the peak reached in late in 2001. Long-term Desjardins thinks affordability will continue to improve. "Prices are going to go up slowly,"
said Ms. Bégin. "Out west we've seen a turning point where prices are going down."
The drop in prices is good news for home builders, according to the chief operating officer of the Canadian Home Builders' Association.
"If you were sitting in my chair what you would be experiencing is one very busy housing industry from coast to coast," said John Kenward. "There has been a slowing down in certain markets and builders in those market say it's a return to a more normal market place."
· TSX +286.29pts its highest advance in 3 weeks, as investors snapped up energy stocks after U.S. inventory data showed a bigger than expected drawdown of gasoline stocks last week.(Reuters)
· Dow +68.88pts as the financial sector improved despite mounting worry and a growing conviction that the U.S. government will have to bail out government sponsored mortgage enterprises Freddie Mac and Fannie Mae.
· Dollar .02c to $94.23US
· Oil $.45to $114.98US per barrel as traders shrugged off a massive increase in U.S. crude inventories and a stronger U.S. dollar and focused on possible supply threats.
· Gold -$.80 to $810.30US per ounce
Weakness in Canadian economy helping homebuyers
Financial Post Garry Marr, Canwest News Service There is some good news in the falling housing market, affordability is improving.
Desjardins Economic Studies says that after eight years of rising prices, housing costs are going down. "For the second quarter in a row we have had an increase in affordability," said Hélène Bégin, senior economist with Desjardins.
However, she warned consumers should not get too excited about the market conditions because affordability is still very close to the all-time low reached in 1990.
The Desjardins Affordability Index is calculated by determining the ratio between average household disposable income and the income needed to obtain a mortgage on an average-priced home, known as the qualifying income.
The report from Desjardins said its affordability index climbed to 110.7 last quarter after dropping close to 100 at the end of 2007. In the early 1990s, the affordability index was as low as 93.6.
Desjardins says that affordability has increased by about 10% in the past two quarters because of falling home prices and lower mortgage rates.
The Canadian Real Estate Association said last week that the average price of a home sold in the country's major markets was $327,020, a 3.6% increase from a year ago. It was the second consecutive month prices had dropped on a year-over year basis.
Statistics Canada also said last month new homes prices grew only by 3.5% in June from a year earlier. It was the slowest rate of growth since March, 2002.
Desjardins noted that in the first half of the year, existing home prices rose by 4.4% compared to 10% a year earlier. The posted rate on a one-year mortgage also fell from 7.25% in March to 6.3% by the end of June. The posted rate on a five-year mortgage fell from 7.15% to 7.1% during the same period.
"House prices are just not going up as strongly as before and in some places in Western Canada, like Calgary, we have had some price drops. With the kind of return we have in Calgary, it has a big impact on affordability," said Ms. Bégin.
Prices in Calgary fell 7.8% in July from a year earlier, according to CREA.
They were off 5.8% in Edmonton during the same period. Desjardins says affordability in Calgary improved by 7.5% over the last three months.
Even with the improved conditions, affordability is still off almost 30% from the peak reached in late in 2001. Long-term Desjardins thinks affordability will continue to improve. "Prices are going to go up slowly,"
said Ms. Bégin. "Out west we've seen a turning point where prices are going down."
The drop in prices is good news for home builders, according to the chief operating officer of the Canadian Home Builders' Association.
"If you were sitting in my chair what you would be experiencing is one very busy housing industry from coast to coast," said John Kenward. "There has been a slowing down in certain markets and builders in those market say it's a return to a more normal market place."
Wednesday, August 20, 2008
Financial Update
· TSX -55.52pts A sharp selloff in bank stocks sent the Toronto stock market lower , but TSX losses were limited by solid gains in energy and mining stocks.
· Dow -130.84pts after former International Monetary Fund chief economist Kenneth Rogoff said that "the financial crisis is at the halfway point, perhaps." He added that he expects "one of the big investment banks or big banks" to go under.
· Dollar .29c to $94.25US
· Oil $1.66to $114.53US per barrel after the U.S. dollar weakened against the euro and a rally in heating oil pulled new buyers into energy markets.
· Gold +11.40 to $811.10US per ounce
Wholesale sales register fifth hike in six months
Eric Shackleton The Canadian Press
The Canadian economy appears to be growing, but at a weak pace, after grinding to a halt earlier this year, with recent economic numbers suggesting things might not be as bleak as first thought. Statistics Canada reported yesterday wholesale sales were up 2% to $45.2 billion in June, the fifth increase in 6 months. They were up 1.5 per cent in May and 1.6 per cent in April.
Craig Alexander, deputy chief economist at TD Bank Financial Group, called the increase "significant,'' noting they were still up a "solid'' 1% even after stripping out price effects
Globe and Mail-Report on Business NEW YORK — Applications for U.S. home mortgages last week fell to their slowest pace since December 2000. Applications for mortgages mirror the slump in U.S. housing that is now in its third year, according to the drop in home prices as measured by the Standard & Poor's/Case Shiller indexes. In addition to rising rates, lenders have sharply tightened requirements for obtaining a loan, squeezing out borrowers without strong credit ratings
· Dow -130.84pts after former International Monetary Fund chief economist Kenneth Rogoff said that "the financial crisis is at the halfway point, perhaps." He added that he expects "one of the big investment banks or big banks" to go under.
· Dollar .29c to $94.25US
· Oil $1.66to $114.53US per barrel after the U.S. dollar weakened against the euro and a rally in heating oil pulled new buyers into energy markets.
· Gold +11.40 to $811.10US per ounce
Wholesale sales register fifth hike in six months
Eric Shackleton The Canadian Press
The Canadian economy appears to be growing, but at a weak pace, after grinding to a halt earlier this year, with recent economic numbers suggesting things might not be as bleak as first thought. Statistics Canada reported yesterday wholesale sales were up 2% to $45.2 billion in June, the fifth increase in 6 months. They were up 1.5 per cent in May and 1.6 per cent in April.
Craig Alexander, deputy chief economist at TD Bank Financial Group, called the increase "significant,'' noting they were still up a "solid'' 1% even after stripping out price effects
Globe and Mail-Report on Business NEW YORK — Applications for U.S. home mortgages last week fell to their slowest pace since December 2000. Applications for mortgages mirror the slump in U.S. housing that is now in its third year, according to the drop in home prices as measured by the Standard & Poor's/Case Shiller indexes. In addition to rising rates, lenders have sharply tightened requirements for obtaining a loan, squeezing out borrowers without strong credit ratings
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