With the housing boom over in June, the concern becomes how much will the now sky-high home prices drop and could this push us into recession. Current low inventory and low home building starts means prices are protected (low supply). Mortgage rates have already dipped from their high but if they rose again that would push home prices down (lower demand). High unemployment and higher mortgage rates in the future would be two conditions for a recession. We’ll keep you updated.
Stocks recovered some of the early loses in June, but still closed down for the month. The average loss of the DOW (DJI) and the S&P 500 indices is -8% for the month. All stock market sectors were negative. Stock averages are down -10.6% over the past year.
Now some good news. Inflation slowed in June. CPI (consumer price index is a measure of inflation) seems to be leveling. A recession is not imminent as economic signs are still strong (for example, high levels of household cash, corporate cash, low unemployment, continued consumer consumption). Consumer confidence however is very low. If the Federal Reserve stops with three rate hikes (because inflation comes under control, spending slows) stock prices would climb again.
Blooms have come on early this season. Poppies, lavender, and bee balm dance onstage at once in late June this year. Their time in the sun is short and they make the most of it. Their purpose is clear to them, to respond wholeheartedly to the forces that support them, then build some reserves for the future. Their spectacular performance is an annual joy. Tickets are free.