Do you feel as if you’ve been deceived, lied to and taken
for a fool as far as your equity investments are concerned? Those
of us who have put faith in our prospectus and annual stock reports
are now feeling an uncertain stir in the pit of our stomachs as
each new day brings another corporate disaster. Today, as I sit
down to write this column, Martha Stewart’s credibility is
being questioned. Is darling Martha brewing something other than
a good “stock” in her soup pot? Micron and Samsung Electronics
are being probed by the U.S. Justice Department, Tyco International
has taken on new light after its former chairman was indicted for
sales tax fraud in New York State, and I.S. stocks fell again after
Apple and Advanced Micro Devices cut their sales forecasts. I have found, over the past few months, a pronounced shift in consumer investing (burn me once…). It seems that there is a significant increase in the amount of investor financing in real estate. Beechwood Capital Company’s clients are mortgaging investment properties on the East End and wherever new construction and resale properties are available. The good news is the treasury market rally combined with new hone purchase reports. The Commerce Department said the other day builders broke ground on new homes at an annual pace of 1.73 million units last month, up 11.6% from April’s 1.55 million and exceeding economists’ projections of 1.6 million. The May increase was the largest since July 1995. As a result, all homebuilders’ stocks, such as KB Home, rallied. The big bond rally of the last two months is gathering attention. The two and a half month rally has slashed the ten-year treasury yields from 5.43% at the start of April to 4.77% as I write this article. Consumer prices show that inflation isn’t quickening as the economy rebounds. These reports heighten speculation that the Federal Reserve will leave its interest-rate target at a 40 year low of 1.775% until next year.
30
year fixed 6.625% |
