It was an unusual day in the markets as a strong housing report sent the Dow up almost 100 points at the opening bell only to see those gains diminish into the close as the Dow ended the day with a meager 17 point gain on heavy volume at 18,547. Markets are in record territory but anxiety is higher than a kite.
In Jackson Hole, Wyoming this week the Federal Reserve will meet to discuss the economy and interest rate policy. Then on Friday, Fed Chair Janet Yellen will give a speech in which most market gurus will be hanging on her every word trying to figure out when and if there will be a rate hike. My feeling is that we will not see a rate hike until after the “upcoming” so as not to be labeled as “political”.
Analysts were surprised at the strength behind a bullish report on the housing market which appeared to spark institutional buying in homebuilding, construction and mortgage stocks. New-home sales soared 31.3% in July, hitting a new post-recession high of 654,000 at an annualized rate. The number was well above the 580,000 that the gurus had expected.