Market Update March 9

Market Update March 9

>> Market UpdateQUOTE OF THE WEEK... "Success is a journey, not a destination."--Ben Sweetland, American author and psychologistINFO THAT HITS US WHERE WE LIVE... As we successfully journey through the housing market, we continue to observe encouraging signposts. For example, the Fed's latest Beige Book reports that lending, home sales, and home prices were up in most of the 12 Federal Reserve Districts across the country. This was put to expanded economic activity across many business sectors in the majority of U.S. regions. A property economist at a major economic research consultancy agreed: "...with affordability set to remain favorable and the wider economy growing strongly, mortgage volumes and home sales should strengthen from here."CoreLogic's Home Price Index showed U.S. home prices 5.7% higher in January than a year ago. That makes 35 months in a row of year-over-year home price gains. Their CEO commented: "We continue to see a strong and progressive uptick in home prices as we enter 2015. We project home prices will continue to rise throughout the year and into 2016." The chief economist at a national listing site feels these price gains "encourage more sellers to put their homes on the market." This "higher level of inventory along with growing demand should result in more February, leading to more closings in March."BUSINESS TIP OF THE WEEK... It's been said the key to success is being of service to others. The more people you help, the more wealth, health, security, and happiness you will have. What you give is what you get. >> Review of Last WeekJOBS UP, STOCKS DOWN... Sometimes the headlines don't make sense. The Nonfarm Payrolls report saw a way-better-than-expected 295,000 new jobs added to the economy in February, while the Unemployment Rate dropped to 5.5%. The reaction on Wall Street? Stocks tanked, sending the three big market indexes to their second straight week of losses. You'd think investors would be happy that a strong jobs report means the economy is growing, consumers are better off, and corporate earnings will probably grow. Well, they also feel such a report will probably inspire the Fed to start raising rates sooner, perhaps as early as the June meeting. Actually, when you look past the headlines, that jobs report wasn't so swell. The dip in the Unemployment Rate was due to 354,000 people dropping out of the labor force in February, cutting the participation rate to 62.8%. We also have the nagging problem of stagnant wages, as average hourly earnings rose a miniscule 0.1% for the month (that's 3¢ an hour). So the Fed may remain "patient" about raising rates. In other economic news, the usual mixed bag of data saw the ISM manufacturing down, ISM Services up, Q4 Productivity down, and the Trade Deficit smaller, though still more than $41 billion. This is also the worst yearly start for jobless claims since 2009. The week ended with the Dow down 1.5%, to 17857; the S&P 500 down 1.6%, to 2071; and the Nasdaq down 0.7%, to 4927.It was a tough week in the bond market, ending with that better-than-expected jobs report. The 30YR FNMA 4.0% bond we watch finished the week down .16, to $106.14. Yet for the first time in four weeks, national average fixed mortgage rates headed lower in Freddie Mac's Primary Mortgage Market Survey for the week ending March 5. Rates now hover near 21-month lows. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up to the minute information. DID YOU KNOW?... U.S. oil production has grown dramatically. In 2005 we imported 11.1 times the amount of oil we exported. In the last year, imports have only been 2.3 times exports. >> This Week’s Forecast RETAIL REBOUNDS, CONSUMERS UPBEAT, WHOLESALE PRICES OK... February's Retail Sales numbers are expected to rebound into positive territory, a good sign, since consumers drive about 70% of the economy. Hopefully, this trend will continue. Many analysts predict that it will, at least as measured by the March Michigan Consumer Sentiment index, which continues to lunge higher. The Producer Price Index is forecast to show wholesale prices remained under control in February.>> The Week’s Economic Indicator CalendarWeaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. Economic Calendar for the Week of Mar 9 – Mar 13 DateTime (ET)ReleaseForConsensusPriorImpactWMar 1110:30Crude Inventories3/7NA10.303MModerateWMar 1114:00Federal BudgetFebNA–$193.5BModerateThMar 1208:30Initial Unemployment Claims3/7306K320KModerateThMar 1208:30Continuing Unemployment Claims2/282.421M2.421MModerateThMar 1208:30Retail SalesFeb0.4%-0.8%HIGHThMar 1208:30Retail Sales ex–autoFeb0.6%–0.9%HIGHThMar 1210:00Business InventoriesJan0.1%0.1%ModerateFMar 1308:30Producer Price Index (PPI)Feb0.3%–0.8%ModerateFMar 1308:30Core PPIFeb0.1%–0.1%ModerateFMar 1310:00Univ. of Michigan Consumer SentimentMar95.895.4Moderate >> Federal Reserve Watch Forecasting Federal Reserve policy changes in coming months... Friday's February jobs report hit the Fed's target unemployment rate of 5.5%. So, more economists think the Fed Funds Rate will start heading up as early as the June meeting. Note: In the lower chart, a 3% probability of change is a 97% certainty the rate will stay the same.Current Fed Funds Rate: 0%–0.25%After FOMC meeting on:Consensus Mar 180%–0.25%Apr 290%–0.25%Jun 170%–0.25%Probability of change from current policy:After FOMC meeting on:Consensus Mar 18 0%Apr 29 3%Jun 17 22%

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About Ralph and Karen: THE CHIODO TEAM - Ralph Chiodo Broker / Owner 610-792-4800 x 111 K...

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