Mortgage applications are down for the seventh week in a row:
We know exactly what's causing potential borrowers to rethink their purchasing decisions. The national average rate on a 30-year fixed mortgage has risen to 4.36 percent from 3.40 percent in May, according to Bankrate.com. This equates to an extra $256 per month on a $500,000 mortgage. Blame Bernanke for suggesting the Fed may slow its bond-buying program.Read more »
Half the companies in the S&P 500 have reported earnings, and consumer companies selling products like clothes and movies are expanding the bottom line 12 percent from last year (more than double the average for the S&P 500).
"What about banks' 35 percent earnings growth" you ask? Their gains are coming from lower loan loss provisions and higher trading activity. Record low default rates mean the accretion of lower loss reserves is running out. So we look to cash earnings due to higher sales, and the consumer discretionary sector is selling plenty to willing buyers. U.S. personal consumption is near an all-time high $11.39 trillion on an annualized basis.