Market News – Citigroup (NYSE:C), Fannie May (NYSE:FNM), Freddie Mac (NYSE:FRE)
The NASDAQ, S&P and Dow have all started the day down slightly, disappointing after yesterday’s strong showing. The decline in futures was based partially on poor home construction figures, which is an important economic bellwether in the United States. According to the Commerce Department, new home construction declined 10% in May. Compounding this misfortunate statistic is the decline in new permit applications for new buildings, which is used as a sign of future construction. New permit applications were down 5.9% in May, reaching its lowest level so far this year.
Experts believe this decline in new home construction is in part because of the expired government tax credit for first time homebuyers. The tax credit was used to cushion the decline felt by the housing market last year, at the height of the real estate crash. In other news, wholesale inventories were also reported down for last month, according to the Labor Department.
In banking news, it’s being reported by Reuters that a tentative deal has been reached in the sale of some of Citigroup (NYSE:C) Canadian holdings. The deal, between Citi and the Canadian Imperial Bank of Commerce, is for the $2 billion Canadian MasterCard holdings of Citibank. Specific details on the deal have not yet been released to the public.
On the positive side of the economic data, reports released yesterday shows that there continues to be very low inflationary pressure on the US dollar. This is going to allow the Fed to keep interest rates at their low level, which is positive for investors and business. The economy is showing a good amount of resiliency to its recent woes, which the steady and healthy recovery from the 2008 crash is to continue.
Finally, for our last news for the day, Fannie May (NYSE:FNM) and Freddie Mac (NYSE:FRE) have sent news to the Securities Exchange Commission that they intend to delist their public and preferred stocks. According to the Wall Street Journal, the Federal Housing Finance Agency directed them to delist because the government-backed mortgage dealers stock continued to hover under $1. Stock-exchange requires a minimum price of $1. The two stocks will be traded instead in the over-the-counter market, once the delisting is complete.
That’s all for the day. We’ll see you here tomorrow, faithful readers!