Burbank Real Estate Agent Ana Connell

• Retail Sales came in +.2%, better than the unchanged number they were expecting. Given that most of this increase came from sales at gas stations, I’m not really sure how you can put a positive spin on it. Business Inventories came in as expected at .6%. Many were hoping to see these shrink as it would indicate consumers are doing more buying.(Monday)

• Producer Price Index the markets were excited without food and energy it only rose .2%, with food and energy it rose by a stellar 1.1%, but really folks, I think it’s time we start looking at the entire picture. Housing Market Index was unchanged at 20, which would point to some stabilization in the housing market.(Tuesday)

• Consumer Price Index came in as expected. Housing Starts both starts and permits weakened, starts, down 11.9% for the month and down 36.5% year over year, posted one of their weakest readings since the 1991 recession. Building Permits, fell 5.8%. Industrial Productionwas slightly higher than expected.(Wednesday)

• Jobless Claims, came in at 372,000, a bleak reading for the overall economy as job strength will be a key component to a recovery. Leading Indicators came in at .1% giving rise to the notion that the economy is just flat and not in a recession. Given the overall picture I’m not sure I would agree with this assessment. I think it’s a very subjective picture depending on where you live or how you have been personally impacted by $4 per gallon gas, job losses, foreclosures etc. (Thursday)

• Bonds…2 year 2.13%, 5 yr. 2.89% and the 10 yr. 3.70%, quite a bit higher than last week.
• Crude oil finished at $116.75 per barrel.

Wow, great gains for stocks this week following a spate of dismal earnings reports from financial institutions. Citigroup announced a $5.1 billion dollar loss and is cutting 9,000 more jobs, but because this was not as bad as some analysts were predicting, the market rallied.

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• Consumer Credit-slowed substantially in February, $5.1B v.$10.3 in January.

• Pending Homes Index-outlook for the housing sector worsened as existing home sales fell 1.9% in February. Given the slowdown in the job market I would say this number will continue to look grim in areas where job losses are the heaviest.
• FOMC Meeting Minutes- Most downbeat in a while as the Fed said that fighting a recession is it’s number 1 priority but fighting inflation is just as important. Economic growth forecasts were lowered, but the Fed sees a recovery in the second half of 2008. I’m not holding my breath on this forecast as they have been trailing what’s really happening by a good margin!

• International Trade -This figure worsened which is indicating that the first quarter was weaker than the forecasts. The area this points to is a weakening in the manufacturing sector.
• Chain Store Sales-another dismal month for the retailers, not surprising considering the challenges families are facing.
• Jobless Claims -Claims were less than expected which was good for stocks.

• Import/Export Prices-Surged 2.8%, not surprising considering the weakness in the dollar. What this basically says is that we’re paying more for foreign goods.
• Consumer Sentiment-Consumer sentiment tanked as inflation continues to plague the average consumer.

• Bonds…2 year 1.74%, 5 yr. 2.50% and the 10 yr. 3.50%.
• Crude oil finished at $110.14 per barrel.

Wow, the GE announcement certainly shattered what would have otherwise been considered a calm week of sideways trading. Ge is considered a bellwhether stock and a shortfall announcement will be seen as a possible precursor to future bad news from other financial companies. The Dow finished the day down 257 points(2%) to close at 12325. The S&P 500 index also declined 2% to 1333 and the Nasdaq fell 2.6% to 2290. GE announced that 1Q earnings fell 8%, to 44 cents per share missing the consensus of 51 cents per share. This is significant in that their revenues increased by 8% in the same period. Most of the havoc was caused by the financial business although they also noted that their industrial and healthcare divisions took a hit.

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The Economic Week in Review:

• NAPM Chicago Index showed a slight jump in orders, which was positive, but also showed a jump in prices, probably due to rising fuel prices.
• Motor Vehicle Sales were weak, lowest rate since 1996, Construction Spending was down but better than expected and ,ISM Manufacturing Index continued to slip and new orders are down.
• Challenger Job Cut Report, reported heavy job cuts in the government, financial and transportation sectors. Factory Orders fell more than expected .
• Monster Employment Index, rose slightly and Jobless Claims, posted worst numbers since Hurricane Katrina in 2005.
• Employment Situation(non-farm payrolls), much worse than expected as 80,000 jobs went away versus the expected 50,000..
• Bonds…2 year 1.82%, 5 yr. 2.62% and the 10 yr. 3.47%.

Between recession talk from Federal Reserve Chairman Ben Bernanke and the worst jobs report since 2003 it’s not looking pretty. At this point I’m not trying to be pessimistic at all, but you have to admit that the overwhelming evidence supports the fact that we are and have been in a recession for at least a few months.

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• Existing Home Sales rose 2.9% in February, housing supply is sitting at 9.6 months nationally.
• The Case Shiller Index came out with LA County down 16.5%.
• Consumer Confidence continued it’s downward spiral to lowest level since 2003
• New Home Sales were down 1.8% to a 13 year low.
• Durable Goods dropped for second month in a row, giving credence to the fact that we are already in a recession.
• Jobless Claims were improved.
• Personal Income and Outlays rose more than expected, but they cite technical reasons for this, such as Medicare Part D payments and government assistance that were given out.
• Consumer Sentiment showed slight weakness, not enough to upset the markets.
• Markets ended the week down 1.2% at 12216.40. Of the 30 Dow components, 22 posted losses.
• Bonds…2 year 1.69%, 5 yr. 2.54% and the 10 yr. 3.48%.

Housing stats for February 2008 for Burbank, Studio City, Hollywood Hills, Glendale, Valley Village and surrounding areas!

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