Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
U.S. stock markets seesawed between losses and gains today after a home price reading and consumer confidence data gave traders little direction. The Case-Shiller 20-City Home Price Index showed that home prices rose 1.8% in July, or 0.6% on a seasonally adjusted basis -- another data point that shows slowing home price growth because of high interest rates. Mortgage rates started to rise in May, and the lag in housing purchases means that it takes some time for those rates to hit economic reports. What was encouraging about the report is that home values still rose, and with rates falling over the past couple of weeks, we may see a pickup in activity this fall.
The other economic report out today is the Conference Board's Consumer Confidence Index, which read 79.7, down from 81.8 last month. This is a preliminary September reading, and investors should keep in mind that consumer confidence readings can be volatile from month to month. We'd rather see the figure rise, but it's nothing to worry about today. Near the end of trading, investors didn't quite know how to react to the economic news, and the Dow Jones Industrial Average (DJINDICES: ^DJI ) was down just 0.15%, while the S&P 500 (SNPINDEX: ^GSPC ) had lost less than a point -- a virtual standstill for the market.
On the positive side of the Dow, Boeing (NYSE: BA ) is up 1.5% despite missing out on a $7.7 billion bid to build fighter jets for South Korea. That's bad news, because Boeing was the only bid that came in under budget. The country will reopen bids and is likely looking for aircraft with stealth capabilities Boeing couldn't offer. Competitor Airbus also announced today that it sees worldwide aircraft doubling over the next 20 years, which should mean more demand for both Boeing and Airbus. It's interesting that Boeing's stock rises on speculation of a South Korea deal and then rises again when it loses the bid. It makes me wonder when this stock will ever go down.
On the flip side, JPMorgan (NYSE: JPM ) is down 1.5% after Reuters reported that the company is in talks with the government over a civil case involving mortgage-backed securities. This comes less than a week after JPMorgan settled its "London Whale" and wrongful credit-card billing cases for $1 billion. The company would like to put the financial crisis and the London Whale fiasco behind, it but the downside is that it's costly to the company and investors. Big banks come with all sorts of unseen risks -- one reason I'm leery of getting anywhere near them.
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