Marketbites: Mortgage Rates Hit New Highs
MARKET PERFORMANCE:
Portfolio Manager Commentary:
Stocks fell Thursday as excitement around blockbuster Nvidia results failed to boost the broader market, and investors looked ahead to a key speech from Federal Reserve Chairman Jerome Powell. Nvidia shares reached an all-time high after the company reported quarterly earnings and revenue that exceeded lofty analyst expectations. The company also raised its guidance, with executives predicting third-quarter revenue would climb to $16 billion, or a year-over-year increase of 170%.
However, the stock closed just 0.1% higher yesterday, and the broader tech sector was under pressure. Shares of Amazon lost 1.8%, and Apple declined 1.9%, while Netflix shed 3.8%. The information technology sector was among the S&P 500′s biggest losers, down 1.2%, weighed by declines in other semiconductor stocks including Advanced Micro Devices and Intel. Dollar Tree was the worst-performing stock in the S&P 500, losing 12% on disappointing third-quarter guidance. Shares of Nike shed 1.1%, extending their record losing streak.
“I think it’s a very narrowly focused market,” said Phillip Colmar, global strategist at MRB Partners, adding that just a few names are driving the entire market. “I do think if you’ve got a better growth backdrop and higher bond yields, it lends itself naturally to a broadening of the market. We saw some of that in recent weeks.”
Chart of the Day:
The average 30-year fixed mortgage rate has hit 7.23%, a fresh high that hasn't been seen since 2001. The new high is a turnabout from two years earlier, when borrowing rates were below 3%, near record lows. Millions of people were rushing to buy homes and refinance. Now, financing a typical home purchase costs hundreds of thousands of dollars more in interest.
Applications for purchase mortgages dropped to their lowest levels since 1995, the Mortgage Bankers Association said this week. Existing-home sales fell for the fourth time in five months in July.
Source: WSJ
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