Registered Investment Adviser Caleb Lawrence
Generally positive economic data helped the major averages to modest gains in the final hour. The May Treasury International Capital or TIC report showed 91.9 billion in net foreign investment, a 10-month high. Treasury, corporate and agency bonds were all very popular, interest in equities fell sharply remaining barely positive.
Mortgage activity jumped last week erasing almost all of the prior week’s decline. After the Mortgage Bankers Association reported a 6.3% gain led by a 13% advance in refi’s and a 1.1% improvement in purchase activity. The 30-year contract rate for a conforming loan was unchanged at 4.22%.
Housing starts and permits rebounded in June snapping a string of losses. Starts increased 8.3% on a large jump in multi-family construction to 1.215 million units annualized. Permits gained 7.4% on strength in multi-family activity to 1.254 million units annualized.
The Bureau of Labor Statistics reports that median usual weekly earnings jumped 4.2% from a year ago in the second quarter. This marks a second consecutive quarter of solid wage growth. That said I have not seen wage gains of this magnitude in other metrics, so I’m a little skeptical of the strength being reported here as other metrics show wages increasing at about half this rate, but will see.