• In its latest global outlook, the International Monetary Fund (IMF) slashed the growth forecast for every major country and urged more recovery actions. The IMF said the global economy will likely contract 1.3% this year and post a 1.9% gain next year, Reuters reported.

• Mercatto Estrategia FI, a Brazilian hedge fund that is beating 97% of its peers, is selling assets of the country’s largest homebuilders and banks, saying they are overvalued, Bloomberg reported. “Since we’ve lived through a liquidity crisis, it shook up the economy a lot and there have been huge declines in healthy names,” Regis Abreu, the head of equity at Mercatto, told Bloomberg.

• Prices of U.S. single-family houses rose a seasonally adjusted 0.7% in February, the Federal Housing Financing Agency (FHFA) said. The FHFA’s index is calculated by purchase prices of houses financed with mortgages sold or guaranteed by Fannie Mae (FNM) and Freddie Mac (FRE), Reuters reported.

• Home prices in Dubai could sink as much as 70% from their peak values late last year on sour demand and a halt in mortgage lending, UBS AG (UBS) said in a report. “We are still in relatively early stages of the property down-cycle in United Arab Emirates,” Saud Masud, a Dubai-based analyst at the Swiss bank, wrote in a report to clients, Bloomberg reported. “We believe risk-reward profiles are not yet compelling for investors to consider market re-entry, hence continued price declines are expected.”

• Apple Inc. (AAPL) reported second-quarter profit and sales that exceeded analysts’ estimates. Apple’s iPhones and new iPod models helped spur sales of $8.16 billion that yielded net income that amounted to $1.21 billion, or $1.33 a share, in the period which ended March 28 Apple said today in a statement. Analysts predicted profit of $1.08 a share and sales of $7.95 billion, according to a Bloomberg survey.

• Agents with the Pentagon’s Defense Criminal Investigative Service searched the Malvern, PA offices of a unit of Germany’s Siemens AG (ADR:SI) on Wednesday.  The search was part of an ongoing investigation, a Pentagon spokesman said.  Ed Bradley, special agent in charge, said the search began early on Wednesday and continued throughout the day, but he gave no details on the nature of the investigation, according to Reuters.
• David Kellermann, the acting Chief Financial Officer at Freddie Mac (FRE), was found dead early Wednesday in the basement of his home in a Washington suburb, police said. Early reports from sources in the police department indicated Kellermann’s wife reported a suicide. There were no signs of foul play, and the death is under investigation, Fairfax County, Virginia, Police Officer Shelley Broderick told Bloomberg. The medical examiner’s office said it’s conducting an autopsy.

• In a sign that efforts to overhaul its main auction and fixed-price retail site may be working, EBay Inc. (EBAY) reported sales and profit that beat analysts’ estimates, Bloomberg reported. The most-visited U.S. e-commerce site said net income was $357.1 million, or 28 cents a share, compared with $459.7 million, or 34 cents, a year earlier.  Excluding some items, earnings were 39 cents a share, beating the 34-cent estimate by analysts.

Source: Global Investment News Briefs Thursday April 23, 2009

Last week, the February Housing Starts report handily beat estimates. While this may only be a temporary spurt, it was a positive surprise. The growth was primarily focused in the Northeastern states, but again, any increase in this dismal sector is a positive.

On Monday, I surmised that the Existing Home Sales report for February would beat estimates when announced, and sure enough it did. Foreclosures are driving down prices to the point that the market is now ‘affordable’ again to first-time buyers.

This past weekend I spoke with my father. He is a realtor in Ann Arbor, Michigan, and he mentioned something that is being overlooked, the first-time homebuyer tax credit. This year the rebate doesn’t have to be re-paid, and is worth up to $8,000. The company he works for feels this will be a significant driver of sales this year, as homes are finally affordable again to those priced out a few years ago, and the tax credit makes purchasing all the more appealing.

Something else I thought about too: with the moratorium on foreclosures and the Obama administration’s never-ending search for a solution, we may see the number of foreclosures slow significantly. This means less inventory, a slowing in the price declines, and eventually, an up-tick in prices.

Combine all of this with mortgage rates that are the lowest since WWII (albeit difficult to qualify for) and we may be starting to see the light at the end of the tunnel.

Source: Is The Porch Light On In The Housing Market?