Markets were heading lower on Monday morning after it was announced that U.S. home sales dropped last month. The National Association of Realtors said that the unexpected drop showed home sales falling 1.8% to an annual rate of 5.05 million units. Last month’s drop was the first in four months of gains for the index. Economists had been projecting sales to increase to a 5.20 million unit pace. When compared against the numbers from this time last year, sales are down 5.3%. Despite the less than stellar news last month, some economists are projecting higher numbers in the coming months due to a growing labor market and some loosening of the strict lending policies. Chief economist of the NAR, Lawrence Yun, said, “First-time buyers have a better chance of purchasing a home now that bidding wars are receding and supply constraints have significantly eased in many parts of the country.”
Shares of Alibaba Group Holding Limited (BABA) were trading slightly lower after the company went down in history as the world’s largest IPO. The company went public on Friday for a total of $25 billion. This brought in a total of $300 million for the underwriters of the sale. The IPO beat out the previous record that was set by Agricultural Bank of China in 2010, when they raised $22.1 billion. On Friday morning the IPO had reached $21.8 billion, shooting the stock up 38%. The underwriters of the deal than exercised an option to sell an additional 48 million shares.
Shares of Apple Inc. (AAPL) were up slightly after the company announced a new sales record after the opening weekend of their iPhone 6 sales. Chief Executive Officer, Tim Cook, said that the company sold over 10 million phones over the weekend. This data beat out the first-weekend sales of the iPhone 5 by 1 million. Cook said, “While our team managed the manufacturing ramp better than before, we could have sold many more iPhones with greater supply and we are working hard to fill orders as quickly as possible.”
That’s all for today,
Warren Gates, Normandy Research