In today's only major U.S. economic report, the Case-Shiller Composite 20-City Home Price Index rose a seasonally adjusted 1% in May, down from April's 1.7% growth. Year over year the index is up 12.2% to 156.14, the highest the index has risen since Spring 2004.
Since the summer 2006 peak, the peak-to-present drop is still roughly 25%. The big question that remains is whether housing prices will continue to rise since mortgage rates jumped nearly a full percentage?
While that's still a historically low mortgage rate, the economy is growing slowly, and prices have been steadily rising, boosted by a lack of inventory. The other thing to consider is when the Federal Reserve will begin to taper their long term asset purchases which have been propping up the mortgage market. After the last Federal Open Market Committee meeting, rates jumped when Ben Bernanke said the Federal Reserve could begin tapering its asset purchases as soon as the end of the year. The committee is meeting today and tomorrow, and at 2 p.m. EDT tomorrow it will release its statement on the economy. We will have to wait and see what happens, though there will likely be little change from before.
Today's Dow leader
Today's Dow leader is Cisco, up 1.2%. Following it up are three other Dow technology stocks: Hewlett-Packard, Microsoft, and Intel. Outside the Dow, Apple is up 1.4%, while Facebook is nearing its IPO price, rising 4.6% to $37.05. The technology sector, particularly large-cap tech stocks, have not kept up with the broader market's rise. Perhaps the market is acknowledging the tech sector's relative underperformance as an opportunity.
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