Stocks end week again at record highs - Stock markets closed at record highs again this week, as more companies released the amount of tax savings under the new tax code. Apple announced that the reduction from 35% to 21% will save them over $45 billion in 2018. Last week Wells Fargo announced that their savings would be $3.35 billion. Earnings for the fourth quarter of 2017 will begin to be released next week. GE, unlike other Dow Jones stocks, dropped 14% this week. It's down 48% in a year, while the Dow is up 31% over the same period. The Dow Jones Industrial Average closed the week at 26,071.72, up from last week’s close of 25,804.19. The S&P 500 closed the week at 2,810.30, up from 2,786.24 last week. The NASDAQ closed at 7,336.38, up from 7,261.06 last week.
Treasury Bond Yields - The 10 year treasury bond closed the week yielding 2.64%, up from 2.55% last week. The 30-year treasury bond yield ended the week at 2.91%, up from 2.85% last week. We watch bond rates because mortgage rates follow bond rates. Because bonds rose again this week we expect mortgage rates to be slightly higher next week.
Mortgage rates higher this week - The January Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average was 4.04%, up from last week’s 3.99%. The 15 year fixed was 3.49%, up from 3.44% last week. The 5-year ARM was 3.46%, unchanged from 3.46% last week.
California ends 2017 with the unemployment rate at a record low - The California Employment Development Department reported that The unemployment rate in California dropped to 4.3% in December. That marks the lowest unemployment rate since the current system of counting the rate began in 1976. California employers' added 52,700 non-farm jobs in December bringing the number of jobs added in 2017 to 342,500. In December 2016 California's unemployment rate was 5.2%. California has now added 2,793,800 since the expansion began in 2010, when the state's unemployment rate peaked at 12.4%.
December housing sales figures will be out next week. They will be included in next week's report. A 2017 year end report will go out as soon as we have those final housing sales and price figures.