Friday Market Update: April 15th 2022 with BRIAN MANNING

Happy Friday. Brian Manning here with the weekly update Let’s see what we got going on this week. So, Monday, we really saw… We’re just seeing general widespread inflation everywhere. If you look across the world right now, in some countries, the cost of food is up 40%. So, you’re just seeing a tremendous amount of inflation, especially in the food industry around the world. Tuesday this week, you know, we had a lot of talk about real estate markets in the media this week. And just a lot of negative talk.

So, I just want to throw something out there for color in the situation. So… in the year that we’re in right now, we’re expected to see $2.6 trillion of new mortgage originations. So, if you look at the last ten years, actually last 13 years of mortgage originations, that’s still in the top three and the top two being last year and the prior year. But… in those years of mortgage originations, you had a tremendous amount of refinance volume that took place as well. So, if you look at 13 years of markets and you pull out last year and the year before, this year’s origination volume is really expected to be one of the highest ranking ever. So, you got to watch the negativity in the news because we’re still seeing a tremendous amount of volume go through. And if we do get the 2.6 trillion of origination volume this year, it’s still going to be one of the best years ever in the purchase market. So, you got to be careful with the negative media there.

Also on Wednesday… Sorry, Tuesday this week, we got PPI. So, PPI stands for the Producer Price Index. This is a measurement of inflation on a wholesale level. We really look at the core rate because the core rate of inflation strips out volatile items such as food and energy. So, core rate on a month-over-month basis was up 1% and on a year-over-year basis of 9%. Again… you know, all this inflation data coming in just really feeding the Federal Reserve likely to see a half a percent rate hike here in May. Not necessarily a bad thing. They definitely need to do something to curb inflation. Historically, rate hikes over time will come inflation and it’s going to be beneficial for mortgage rates. So, PPI was really high.

Wednesday this week, we had quiet news day. And then Thursday, we had a study released from bank of America. You know, Bank of America, largest bank in United States carries a half to a third of all banking customers. And their report shows that credit card debt is on the rise. So, consumer spending is still up. Consumer spending is still really strong, but a lot of people are not spending the cash that they have on hand. A lot of people using credit cards and we’re now starting to see a rise in credit card debt.

We also got the Cass freight shipping index. You know, we talked about this a lot in 2019 leading into really what was the start of a recession in 2020 that all changed from the pandemic. But Cass freight shipping index is a really strong leading indicator because it looks at goods being shipped around the United States. And Cass shipping freight went from being up 3.6% to now being up 6/10th of a percent. So, the shipping index is still up but we have definitely seen it come down dramatically. And again, this tracks goods of new purchases being shipped around the United States.

So, we’re starting to see some indicators there of a slow down. For today, markets will close early for good Friday. I do want to wish everyone a happy Easter. A happy Passover. I will be around all weekend. If you haven’t any questions, give me a call. If you want to go through our strategic buyer consultation, call me on my cell phone or text me. You can reach out to me Saturday or Sunday. I’ll be available both days. Hope you have a wonderful day. Talk with you soon.