Key Takeaways
- US existing home sales experienced a marginal month-over-month decline of 0.2% in August, settling at a 4.00 million unit annual rate, yet still surpassing analyst estimates of 3.95 million.
- The median US home price continued its upward trend, rising 2.0% year-over-year to $422,600 in August, reflecting persistent price appreciation in the housing market.
- Global debt escalated to nearly $338 trillion in the second quarter of 2025, with major economies and emerging markets contributing significantly to the increase, according to the Institute of International Finance (IIF).
- Federal Reserve official Schmid underscored the need for prudent consideration of market effects when reducing the Fed's balance sheet and raised a "big question" concerning appropriate reserve levels.
- US stock markets opened lower, with the NASDAQ 100 dropping over 1%, while IBM (IBM) shares climbed 2.6% following a partnership with HSBC (HSBC) on a quantum-enabled trading system.
US Housing Market Shows Resilience Despite Sales Dip
The U.S. housing market saw a slight contraction in August, with existing home sales falling 0.2% month-over-month to a seasonally adjusted annual rate of 4.00 million units. This figure, while a decline from the previous month's 4.01 million, still outperformed economist expectations of 3.95 million units. Annually, existing home sales increased by 1.8%.
Despite the marginal dip in sales volume, the median price for existing homes continued to rise, climbing 2.0% year-over-year to $422,600 in August. This marks a consistent trend of price appreciation, with the median home price for existing homes also up from $422,400 in July.
Federal Reserve's Schmid on Policy and Balance Sheet
Federal Reserve official Schmid highlighted the primary responsibility of the Vice Chair for Supervision. Schmid also raised a "big question" regarding the proper reserve levels for the Federal Reserve's balance sheet. He emphasized the necessity to carefully consider market effects when reducing the balance sheet.
Schmid further noted that as the Fed approaches its goals, its policy approaches become more precise. This commentary suggests a cautious but determined approach to monetary policy and balance sheet normalization.
Global Debt Reaches Staggering New Heights
A new report from the Institute of International Finance (IIF) reveals that global debt surged to nearly $338 trillion in the second quarter of 2025. This monumental increase pushed the global debt-to-GDP ratio slightly below 324%.
Major countries, including China, France, the US, Germany, the UK, and Japan, witnessed the biggest rise in their debt levels. Emerging market debt also saw substantial growth, increasing by $3.4 trillion and pushing their debt-to-GDP ratio to 242.4%. Notably, Canada, China, Saudi Arabia, and Poland experienced the sharpest jumps in debt ratios.
US Stock Markets Dip, IBM Shines with Quantum Partnership
US stock markets opened lower, extending recent falls. The NASDAQ 100 continued its drop, falling over 1% in the opening session. The broader NASDAQ Composite was down 207.03 points, or 0.92%, at 22,290.83 after market open. The Dow Jones Industrial Average declined 110.11 points, or 0.24%, to 46,011.17, while the S&P 500 fell 41.11 points, or 0.62%, to 6,596.86.
In corporate news, IBM (IBM) shares experienced a notable rise of 2.6% after the company announced a partnership with HSBC (HSBC) to launch the world’s first quantum-enabled algorithmic trading system.
Other Key Developments: Crypto, Geopolitics, and European Finances
Circle, the issuer of the USDC stablecoin, is reportedly considering reversible transactions to help the stablecoin industry become part of the financial mainstream by addressing fraud concerns. Circle President Heath Tarbert noted that allowing refunds in certain cases of fraud would be a significant step.
In Europe, the head of France’s securities regulator dismissed concerns about a potential financial crisis, even after political instability led to two credit downgrades within a week. Meanwhile, Germany’s Merz is advocating for the use of frozen Russian assets to unlock EUR140 billion for Ukraine, as reported by the Financial Times.
On the geopolitical front, the Israeli military claimed to have concluded a large series of strikes targeting Yemen's Houthis in Sana’a. Separately, Leonardo signed a contract extension to support the Kuwait Air Force fleet.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.