2024 | September 30

The Markets

Stocks Extend Gains

U.S. stocks rose for the third week in a row, extending their recovery from a sharp weekly decline in the first week of September. The S&P 500 and the Dow added 0.6% to the record-high levels they reached the previous week; the NASDAQ rose 1.0% and ended up 2.8% below a record it set more than two months ago.

The U.S. Federal Reserve’s preferred inflation gauge on Friday showed further slow-but-steady easing of price pressures. The Personal Consumption Expenditures Index rose at an annual rate of 2.2% in August, slightly below economists’ consensus forecast and the lowest figure since February 2021. Excluding energy and food prices, the core PCE Index rose 2.7%, matching expectations.

Mainland Chinese stocks surged as the nation’s central bank approved measures to accelerate recently sluggish growth for the world’s second-largest economy. The People’s Bank of China on Tuesday announced plans to lower borrowing costs, inject more funds into the economy, and ease households' mortgage repayment burdens.

The U.S. government’s latest estimate of second-quarter economic growth found that GDP expanded at a 3.0% annual rate—the same figure as an earlier estimate, but better than economists’ expectations for a 2.9% rate. Separately on Thursday, the latest weekly total of new unemployment claims fell to 218,000, the lowest claims figure in four months.

An indicator that tracks U.S. consumer sentiment rose for the second month in a row, reversing a recent downward trend that began in the spring. Friday’s 70.1 reading from the University of Michigan’s Consumer Sentiment Index was up from August’s figure of 67.9.

The price of U.S. crude oil dropped nearly 4% for the week to less than $69 per barrel on Friday. That price is down from a recent high of nearly $84 per barrel in early July and is little changed year to date.

A monthly employment report scheduled to be released on Friday will show how September’s jobs growth compared with August’s gain of 142,000 jobs. While that figure was above the previous month’s gain, it was less than economists’ consensus expectations. In addition, initial estimates for June and July were revised downward by a combined 86,000 jobs.

Source: John Hancock Investment Management

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There's a New Twist to Home Buying and Selling

Mortgage rates have been moving lower. Last week, the average 30-year fixed rate mortgage dropped to the lowest level in two years, reported Claire Boston of Yahoo! Finance. This was welcome news to anyone hoping to buy a home.

Climate conscious buyers are also likely to be enthusiastic about a new feature being rolled out by an online real estate marketplace. The digital listing service is partnering with a climate risk financial modeling group to provide additional climate risk information to buyers.

“When viewing a for-sale property…home shoppers will see a new climate risk section. This section includes a separate module for each risk category—flood, wildfire, wind, heat and air quality—giving detailed, property-specific data…This section not only shows how these risks might affect the home now but also in the future, and provides crucial information on wind, fire and flood insurance requirements,” reported the listing service.

About 80% of home buyers consider at least one climate risk when shopping for a house, according to a recent survey. Home buyers in the Western and Northeastern United States are more likely to be aware of and concerned about the impact of climate risks, while about a third of Midwestern and Southern home shoppers say climate factors are not a significant concern as they search for real estate.

The wisdom of considering climate risks when making major financial purchases has been evident in recent weeks as Hurricane Helene left a trail of destruction across Florida and the southeastern United States, Hurricane Francine tore into Louisiana, and flooding and wildfires have plagued regions of the United States.

It’s also critical to consider whether a property is insurable and how much the insurance will cost. The climate risk financial modeling group found that “about 35.6 million properties—a quarter of all U.S. real estate—are facing higher insurance costs and lower coverage because of climate risks,” reported Li Cohen, Tracy J. Wholf, and Marina Jurica of CBS News.

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