The markets continue to be constructive. The Dow closed up 55 points to 21,948 on heavy trading volume. For the month of August the Dow gained about 0.25% and recovered from a midmonth selloff to keep the current rally intact.
The latest Q2 GDP growth estimate has come out and the reported 3% growth rate was much better than the 2.7% figure which had been expected by the gurus. The better than expected reading was attributed to strong consumer spending and business investment in R&D.
On the housing front, the Case-Shiller price index increased 0.4% in June and was up 5.8% from a year ago. That's an acceleration from the 4.9% gain in the year ending in June 2016. The metro area with the fastest growing prices, by far, was Seattle, with a 13.4% gain in the past year. Local city leaders are licking their chops over the anticipated property tax windfall and the ability to pay for freebees. In my discussions with people in the construction business around our area I have not gotten any indications of a slowdown rather they continue the desperate search for workers needed to meet demand. The Case-Shiller price index showed that all of the top 20 metro areas in the country had gains in the past twelve months, with Cleveland's increase of 2.9% pulling up the rear. It will be interesting to see how Houston’s situation will affect next month’s Case-Shiller reading.
WTI crude oil was up 2.4% to $47.08. Natural gas was trading at $3.02 up 2.8% and gasoline shot higher by 13% to a two year high of $2.14 per gallon. About one third of US refining is now offline and the experts are thinking prices could move higher until the water recedes and refiners are able access the damage and make predictions on when they can get back online.