Existing Home Sales July 2012 Rise 2.3 Percent, FOMC Meeting Minutes August State QE3 Coming “Fairly Soon”:
Remember those minutes are old….
Existing home sales rose in July showing the housing market has positive momentum and may have bottomed. Sales increased 2.3 percent to the seasonally adjusted level of 4.47 million units according to the National Association of Realtors. Homebuilding stocks rose after the news and the overall market got a slight lift today although stocks ended the session mixed with the Dow closing down 30 points to 13,172.
Shortly after 2:00, equities got a quick bounce from the days lows when the FOMC meeting minutes from July 31-Aug. 1 stated: “Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,”
In the past three weeks since that Federal Open Market Committee meeting, the economy has shown some signs of improvement which would take QE3 off the table and could cause the Fed to hold off until more data comes in. We are still bearish-neutral short term but we don’t believe a correction is coming at this point and are looking for opportunities on the downside to find new bargains before the longer term rally continues.