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Mark Hemingway

Mortgage Market Update for May 18th

Tuesday, May 19, 2020 - Article by: Mark Hemingway - Security Financial Services, LLC - Message

Promising trial tests from drug-maker Moderna for a coronavirus vaccine is lifting U.S. stocks to begin the week. The Dow Jones Industrial Average was up 900 points in early trading on the news. In addition, positive words on the U.S. economy from Fed Chair Powell on Sunday night on 60 minutes is also adding to the lofty gains. The Dow is now up 34% from the closing low seen on March 23. The yield on the 10-year Note has risen to .70% as risk-on is today's trade.

Home builder confidence edged higher in May after the historic drop in April due to the coronavirus fallout that closed most state economies across the nation. The NAHB Housing Market Index rose seven points to 37 in May, up from 34 in April though below 50, where 50 is the diving line between positive and negative. All six of the components within the index posted gains in May. Oil prices continue to gush higher with West Texas Intermediate oil at $32/barrel as the market eyes future higher demand in the coming months as countries slowly reopen. In addition, output cuts are also helping to boost prices. With the rise of oil prices in May, prices at the pumps are on the rise. The national average prices for a regular gallon of gasoline is at $1.87, up from $1.82 a month ago though well below the $2.58 a gallon seen last year this time. At the start of the Memorial Day work week, the national gas price average is $1.87. The last time the national gas price average leading into the holiday was under $2/gallon was 17 years ago in 2003, reports AAA.

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