The stock market took it on the chin in a big way on Thursday!

The stock market took it on the chin in a big way on Thursday!

The stock market took it on the chin in a big way on Thursday with a drop of 265 points, which comes on the heels of additional declines on Monday and Tuesday.  The cause of the steep decline this week is focused on 3 main areas, global economic slowdown, rising tensions with Russia, and the Middle East.

The tech heavy Nasdaq tumbled 100 points on Thursday led down by Apple.  It seems that the initial concerns about the bending and warping of the new Iphone 6 and 6 Plus is becoming more and more of a problem.  What started out as a few random comments on social media, is now becoming larger and more vocal day by day.

Apple, while trying to figure out what they will need to do to address the problem, they are doing their best towards social damage control. Apple has set new sales records with the release of the new phones, however if the issue of bending continue to grow, it is likely that future sales will be hurt significantly until Apple redesigns the casing, This of course will cut into sales and profits.

Russia this week was vocal in stating that the U.S, does not have the authority to engage in the bombing in Syria according to international law.  The U.S, differs in opinion and the disagreement is further ratcheting up tensions between the two superpowers.

Finally, Japan, China and Europe, are all showing signs of economic slowdown.  Although the United States is continuing to slowly chug along, declines in the 3 largest economies behind the U.S. is creating fear within the investment community.  One thing that became clear during the great recession is that when something happens in one large economy, it will have significant impact throughout the world.

The latest housing data was disappointing with existing home sales falling 1.8 percent in August to a lower-than-expected annual rate of 5.05 million.  Sales are also down from the same time last year by 5.3 percent.  This is greater than the previous month’s difference of 4.5 percent.  Limited supply continues to be a factor holding down sales which remained stable at 5.5 months.

Appreciation of home prices is stalling according to the Federal Housing Finance Agency.  The most recent report for July indicated that home prices rose only 0.1 percent versus 0.3 percent in the prior month.  Additionally, the year-over-year rate declined from 5.1 percent in June to 4.4 percent in July.

The one housing report that was a highlight for the week is the new homes sales report.  New home sales jumped 18.0 percent for the month of August.

JJ Mack
916-517-1800 x 300
JJ.Mack@apmortgage.com
www.apmcroseville.com