Morning Report – Toll Brothers reports the luxury end of the market is doing well 12/10/13

Vital Statistics:

Last Change Percent
S&P Futures 1803.5 -5.5 -0.30%
Eurostoxx Index 2964.6 -24.1 -0.81%
Oil (WTI) 98.47 1.1 1.16%
LIBOR 0.242 -0.001 -0.31%
US Dollar Index (DXY) 79.98 -0.154 -0.19%
10 Year Govt Bond Yield 2.80% -0.04%
Current Coupon Ginnie Mae TBA 104.9 0.3
Current Coupon Fannie Mae TBA 103.9 0.1
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.44
Markets are lower this morning on no real news. Bonds and MBS are higher
Toll Brothers announced better-than expected earnings of 54 cents a share. The luxury end of the market continues to do well. Average Selling Prices increased to $703,000. Contracts were flat in the first 5 weeks of this quarter, as higher prices and interest rates tamp down demand. That said, they believe “this leveling of demand will prove temporary based on still-significant pent-up demand, the gradual strengthening of the economy and the improving prospects of our affluent customers.”
The National Federation of Independent Business Optimism Index rose to 92.5 from 91.6. This is still a relatively depressed level historically, and speaks to the great divide in American business. The S&P 500 is at record highs, while small business is still stuck in the post-bubble morass. The difference: QE is driving money into stocks, and the big US companies that make up the index have a lot of international exposure. That is why the economy feels “meh” even though the stock market is at record highs.
The Obama Administration’s latest housing scorecard is out. As of October, 1.2 million homeowners have had their principal cut through HAMP. Housing remains affordable as the NAR Housing Affordability index stands at 164.3, (lower than its peak of 213.6 in January, but well above its historical average of 135).
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