Pending home sales for February climbed 5.5%, according to the National Association of Realtors. Economists surveyed by Briefing.com were looking for a 2.4% gain. The jump is the largest since July 2010.Pending home sales had dropped 2.8% in January.
It’s not like anything momentous happened over the weekend. It didn’t. But if you’re inclined to read tealeaves, the implications of this weekend are unsettling. Which seems to have affected the financial markets today.
The jump in the price of gold and the even huger spike in the prices of gold mining stocks tells us something really important about how the financial markets see the Federal Reserve’s action and rhetoric on Wednesday, March 15. Gold for April delivery climbed 2% in New York after the Fed raised its short-term benchmark interest rate by 25 basis points. The VanEck Vector Gold Miners ETF (GDX) roared ahead 7.69%
West Texas Intermediate was down 2.74% to $48.90 a barrel today as of noon New York time. International benchmark Brent crude was lower by 2.60% to $51.73 a barrel. The drop in West Texas Intermediate brought the price per barrel below the psychologically important $50 level. Oil had already tumbled 5.7% in the last three trading sessions.
Ahead of Thursday’s meeting of the European Central Bank futures markets have started to raise the odds that the bank will start raising its benchmark deposit interest rate beginning in April 2018. The market was putting the odds of an April increase at 20% last month. Those odds have now climbed to 40%, according to Bloomberg.
Tomorrow morning we’ll see if Trump said enough about the subjects near and dear to Wall Street’s heart–less regulation of the financial sector and lower corporate taxes–to keep the post-Trump-victory rally going. But the real important reaction, the one that I’ll be watching most closely will come from the Federal Reserve
We’ve now got very clear evidence that the bailouts plus austerity solutions haven’t worked in Greece. Since the summer of 2012 Greek government debt has climbed to 183% of GDP from 159%. The economic austerity program imposed on Greece as the price for the bailout has caused the economy to contract. Rather than growing its way out of the debt crisis, the Greek economy has shrunk its way deeper into the hole.
