The overriding theme for the 6% market correction is largely focused on the pace of the recovery and now more investors are focused on the ability of Q2 earnings guidance to sustain the rebound seen in Q1.  Additionally, the impact of rising unemployment on the consumers' ability to make mortgage payment and overall disposable income is creating fresh concerns for weak consumer-related trends.   

We learned this morning that mortgage applications in the U.S. rose last week while refinancing applications jumped the most since March. Additionally purchases climbed to the highest level in three months.   This week's results include an adjustment to account for the July 4th holiday.

The Market Composite Index (a measure of mortgage loan application volume) was 493.1, an increase of 10.9% week-over-week on a seasonally-adjusted basis.  While this news is good, the twelve-week moving average fell 6.4% from the previous week's reading of 752.3.

The refinance share of mortgage activity increased to 48.4% of total applications from 46.4% the previous week. Meanwhile, the adjustable-rate mortgage (ARM) share of activity increased to 4.4% from 4.3% of total applications from the previous week.  The average interest rate for 30-year fixed-rate mortgages remained unchanged at 5.34%. 

Undoubtedly the decline in home prices has brought more homes within reach of more buyers. Incrementally this creation of new demand appears positive, yet with  unemployment at a 26 year high and borrowing costs edging back up, any further improvement in housing will be further down the road. As always, we return to our mantra: "less bad" is not the same thing as "good".

Howard Penney

Managing Director


Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more

Energy Stocks: Time to Buy the Dip? | $XLE

What the heck is happening in the Energy sector (XLE)? Energy stocks have trailed the S&P 500 by a whopping 15% in 2017. Before you buy the dip, here's what you need to know.

read more

Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more