Second Chance Mortgage
Job Market's Fine
A SOFT LANDING THAT ULTIMATELY WILL CURB inflation? Reading between the government's numbers suggests there's plenty of reason to hope.
To be sure, the July employment report, released Friday, added a few grains of sand to the view that the job market is slowing. Judging from the recent weakness in the Mortgage Bankers Association figures on loan applications, the housing market is past its peak. And the "advance" estimate of gross domestic product in the second quarter showed that GDP growth had softened to 2.5%.
Chances are, then, that the Federal Reserve will refrain from any further hike in the ...
.
Related Second Chance Mortgage links
A Damper Housing Market
We at S&P expect mortgage rates to continue rising over the rest of this year and dampen home sales further. House price appreciation continues to soften, which is indicative of the below-peak demand, in our opinion. Builders are likely holding their asking prices back to sell units. Also, new home price appreciation would likely be even weaker if the data could factor in incentives and upgrades, which are also supporting the current pace of sales.
We now see a 35% chance of recession in 2007, due to heightened tensions in the Middle East.
Fundamental Outlook
S&P equity analysts project second-quarter operating earnings for the S&P 500 to advance 12%, vs. their June 28, 2006, growth estimate of 9%. Full-year 2006 earnings are now projected to rise 13%, compared with the earlier forecast of 12%.