Pending home sales dropped 4.9 percent in December, making for the largest drop since May 2010. Following a multi-month decline in new home sales, it's a sign of a struggling real estate market.
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| |  Good morning. Pending home sales dropped 4.9 percent in December, making for the largest drop since May 2010. Following a multi-month decline in new home sales, it's a sign of a struggling real estate market. Of course, the holiday season is typically the slowest for home sales, so some decline was in the cards.
Another factor holding back sales is low inventories. Most homeowners are simply holding on in a tight market. Even with low interest rates and a moderately growing economy, home prices may have gotten ahead of themselves in recent years, at least until supply catches up.
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| | |  | DOW 28,734.45 | +0.04% | | |  | S&P 3,273.40 | -0.09% | | | | NASDAQ 9,275.16 | +0.06% | | | | | *As of market close | | | • | Stocks traded flat yesterday, as the Fed held steady on interest rates, and on mixed earnings. | | | • | Oil declined 0.6 percent, closing at $53.15 per barrel. | | | • | Gold rallied 0.4 percent, moving to $1,576 per ounce. | | | • | Cryptocurrencies traded flat, with Bitcoin rising 0.15 percent to $9,394. | | | | | | | | |
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| Two International Tech Plays With More Upside Potential | |
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Most investors tend to focus on where they live. This is known as a "home country bias."
For U.S. investors, it certainly provides a deep pool of companies to invest in, but it's still only about half the investment world by market cap.
By looking internationally, investors can diversify their holdings, but also invest in companies outside their own currency and away from their own country's political and economic regime.
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| Insider Trading Reports: Cortland Bancorp (CLDB) | |
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Neil Kaback, a director at Cortland Bancorp (CLDB), recently picked up 2,000 shares. The buy increased his stake by 25 percent, and the total cost came to just over $40,000.
This follows on a buy earlier this month by two other directors, who made some small buys as well in the $1,000 range.
Insider data for the past three years shows consistent and sizeable insider buys, with very few sales in between.
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| Unusual Options Activity: FireEye (FEYE) | |
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With 8 days until expiration, the February 7th $16 call options on FireEye (FEYE) saw an explosion in volume, going from 170 open contracts to over 7,350—a 43-fold rise.
The bet, which is essentially at-the-money as shares trade around $16, cost the option buyer about $0.50, or $50 per contract.
The trade will profit the buyer only if shares clear $16.50 by the option expiration.
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| Due to the shortage of affordable homes, home sales growth will only rise by around 3 percent. Still, national median home price growth is in no danger of falling due to inventory shortages and will rise by 4%. The state of housing in 2020 will depend on whether home builders bring more affordable homes to the market. Home prices and even rents are increasing too rapidly, and more inventory would help correct the problem and slow price gains. |
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- Lawrence Yun, Chief Economist for the NAR, on why the slide in home sales in December is against a strong backdrop for the real estate market as a whole.  |
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