A tough week for the stock market after international instability continues to dominate the world headlines. There is so much turmoil between Iraq, Israel and Hamas, and Russia, that investors are becoming increasingly worried about the economy world. 

Add on top of that the world economic indicators showing that more and more countries are experiencing an economic slowdown. The Dow as of Friday morning is down 130 points for the week.

The fundamental of our market I believe are good, not great, but good. American businesses are making a profit and companies have plenty of reserves so we should not see a huge sell off as we did during the debt crisis that almost our economy down into a depression.

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Part of the uncertainty in the market on Friday morning is related to President Obama’s announcement that the U.S. may use military action in the Mideast against ISIS if they attempt to interfere with the humanitarian aid the United States is going to provide to the region. 

Unfortunately based upon ISIS’s track record of disregarding any authority except for their own, many expect that in fact they will attempt to disrupt the aid and once again the United States will be drawn into another military conflict. If that isn’t enough, it appears that relations between the U.S. and Russia are further deteriorating. Although none of it has to do with anything military, (thankfully) it appears that President Vladimir Putin is not showing any signs of backing down from the sanctions instituted by the U.S. and Europe.

Related: Santa Clarita Real Estate News

On the home front in the economy, there has been little happening in the past week that played any major role in the U.S. stock markets. One piece of good news is that factory orders surged in the month of June following a weak May report. The increase of 1.1% was much higher than analysts were anticipating. In addition, the durable goods orders were revised significantly higher to an increase of 1.7%.

Additional good economic news was the stronger than expected report on the ISM Non-Manufacturing Index. This index measures many different areas of economic productivity such as construction, mining, agriculture, forestry, fishing and hunting. This index rose 2.7 points which was higher than expected.

The only report related to the real estate market released this week was the Mortgage Bankers Association report on mortgage applications. The MBA reported that purchase applications declined 1.0 percent while refinance apps jumped 4.0 percent.

The report is not surprising as typically purchase activity declines in the month of August.  Additionally, the economic instability I mentioned earlier has been placing downward pressure on mortgage rates which would easily explain more homeowners jumping in to take advantage of refinancing.

Do you have a news tip? Call us at (661) 298-1220, or drop us a line at community@hometownstation.com.

Next week will be quiet on the economic date side of things.  Add to it that August is the biggest vacation month of the summer.  The only wild card is what may happen internationally which no one knows. 

• Wednesday August 13th – MBA Applications and Retail Sales
• Thursday August 14th – First Time Jobless Claims
• Friday August 15th – Producer Price Index, Industrial Production and Consumer Sentiment 

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.  I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at (661)505-4300.

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