The Big Picture
 The Markets

No sooner did the DOW cross the 14,000 barrier for the first time, the markets came wrenching back. As we have seen all year, housing, lending, and interest rates are fueling the market's wild behavior.

June's new home sales figures were down over 22% from a year ago and down 6.6% from May's figures. While many had hopes of a rebound in the housing market, these figures left little doubt that the decline of the real estate market is likely to continue to at least year's end.

Other worrisome news comes from corporations such as GM and Schweppes. Both companies have had to postpone possible transactions due to the tightening of sub-prime lending.

Because so many people and companies are beginning to default on their high-risk loans, these types of loans are becoming much harder to come by. The lack of accessibility to cash is leaving many worried that banks who have had people defaulting and businesses who might profit from increased spending may suffer significantly.

Another concern comes on the heals of good news. The economy recently posted a higher than expected gross domestic product of 3.4% versus the 3.2% increase that Wall Street analysts expected. While this would appear to be good news, a slowing economy could force the Fed to lower interest rates in 2007. Typically, lower interest rates provide a spark for the economy. Because the economy is fairing well, a rate reduction appears unlikely.

It is difficult to tell if the market's woes will continue. That said, things continue to look bleak for housing, people and companies that need high risk loans, and interest rates. At the very least, the markets may continue to be more volatile than normal.

Research Publications 

 The Office
 

Brenna will be out of the office from August 1st through August 8th. If you need assistance with your accounts or paperwork, feel free to contact Woody.

 

 The Family
 

Earlier in the month, my baseball team participated in an all day tournament at Cal Ripken's minor-league stadium just north of the city. With six teams participating, we had a quite a few fans in the stands to cheer for everyone.

After a long, hot day of baseball, our team won the tournament. While they had been the runner up a few other times, this was the team's first championship for this tournament. Playoffs for our summer league begin in mid August. Wish us luck!

 

 Other Resources
 

We have created a financial planning kit for domestic partners. Included in the kit are brochures on topics such as insurance, pension planning, annuities, long- term care, and basic financial strategies for domestic partners. If you would like a kit for yourself or a friend, please contact our office to request a copy.