Market News 7/29

Markets

Yesterday, stocks concluded the week on a positive trajectory, driven by an upsurge in tech stocks and a decline in inflationary pressures.

Dow, S&P 500 Notch Third Straight Weekly Gains

On Friday, U.S. stocks made a strong recovery, concluding a week of gains, thanks to favorable inflation data that boosted investor confidence and significant contributions from major tech companies, driving the indexes higher.

The S&P 500 experienced a 1% increase, while the Dow Jones Industrial Average rose by approximately 177 points, equivalent to 0.5%. The Nasdaq Composite outperformed, surging by 1.9%.

All three major indexes achieved weekly gains, with the S&P 500 and Dow securing their third consecutive positive week. Notably, the Dow achieved an impressive 13-day winning streak, its longest since 1987, on Wednesday.

The ongoing market rally in 2023 has gained momentum, attributed to the U.S. economy's resilience surpassing expectations. This has boosted investor optimism regarding the possibility of a soft landing, where the Federal Reserve effectively manages inflation without causing a recession. Year-to-date, the S&P 500 has surged by 19%, a significant rebound after experiencing a 19% decline in 2022.

Matt Bush, the managing director of macroeconomics and investment research at Guggenheim Partners, noted that the market is increasingly factoring in the likelihood of achieving a soft landing, a scenario that appeared elusive just a few months ago.

The week was eventful for the markets, featuring the Federal Reserve's latest policy meeting, the release of fresh economic data, and numerous high-profile quarterly earnings reports.

Politics

Our Politicians are getting older

The issue of the age and mental fitness of our country's political leaders has once again become a topic of nationwide conversation after Senate Minority Leader Mitch McConnell experienced a 21-second freeze during a press conference in Washington, DC. While McConnell and his aides assure that he is well and intends to complete his term, this incident, along with other recent health concerns among older politicians, has raised worries among fellow politicians and the public about the suitability of elderly public servants to hold office.

The term "gerontocracy," referring to a government controlled by elderly individuals, saw a significant increase in Google searches, indicating a growing public interest in this matter. Although McConnell, at 81, is currently in the spotlight, he is only the fourth-oldest senator.

Democratic Senator Dianne Feinstein holds the title of the oldest person in office presently. She has faced ongoing health issues that resulted in extended absences from work and calls for her resignation. Recently, during a hearing, she had to be corrected twice for making remarks during roll call.

A poll conducted in April by Reuters revealed that 44% of registered Democrats believe 80-year-old President Joe Biden should not seek reelection due to his age, making him the oldest president in U.S. history. Similarly, 34% of Republicans feel that 77-year-old former President Donald Trump is too old to run for the presidency again.

While members of Congress born before 1946 represent only about 6% of the entire governing body, matching their share in the overall U.S. population, Capitol Hill is predominantly composed of Baby Boomers (those born between 1946 and 1964) who make up nearly 49% of Congress, compared to 21% of the U.S. population. The average age of a member of Congress is 58 years old.

Entertainment

Emmys are being postponed

The anticipated viewing of the four acceptance speech clips will be delayed, as the awards, initially planned for September, are now being rescheduled due to ongoing strikes involving writers and actors, as reported by Variety. The new date for the awards ceremony is yet to be confirmed, with a possibility of it being moved to January. However, the scheduling is still uncertain, given that the Golden Globes are also set to take place in the same month. This marks the first instance of the Emmys being postponed since 2001, when it was rescheduled in the aftermath of the 9/11 tragedy.

Economy

Old homes are selling for more than new ones?

The housing market is experiencing an unusual shift, where older homes, potentially haunted by the poltergeist of past residents, are now priced higher than new ones, disrupting the usual market order.

According to Axios, last month, the median price of an existing single-family home was $416,000, while brand-new homes had a slightly lower median price.

Traditionally, the housing market has favored newer properties due to lower repair and energy costs, making them more appealing to buyers. However, the current situation is different due to rising interest rates. The Federal Reserve's continuous rate hikes have pushed the average 30-year mortgage rate to 6.81%, more than double its lowest point during the pandemic. As a result, many current homeowners, who secured their mortgages at lower rates, are now hesitant to sell their homes. They fear that buying a new property would mean taking on a much more expensive mortgage, contributing to a shortage of pre-owned homes in the market.

On the other hand, aspiring homeowners are still in abundance, leading some developers to focus on providing more affordable homes for first-time buyers. Consequently, housing construction is rebounding from a significant decline experienced in the previous year. This dynamic is reshaping the housing market, with older homes now commanding higher prices than their newer counterparts.