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Friday Market Update: February 18th 2022 with BRIAN MANNING

Happy Friday! Brian Manning here with the weekly update. Let’s get right to it. Let’s see. Overall, this week, the two big market movers just in general that we pay a lot of attention to where the situation between Russia and Ukraine and also the Federal Reserve. So, Russia has amassed 130,000 troops on the Ukrainian border. And this whole time they’ve just been saying it’s for a training exercise, which is insane. So, if you look what’s happening in the financial markets from, you know, last Friday into this week, markets don’t like war. And when there’s a potential risk of war, you see a safe haven movement of money going from the stock markets to bond markets.

So, Friday of last week was, you know, maybe potentially war was imminent and potentially, you know, not avoidable. And then you move into the weekend and beginning of this week and you had some maybe political discussions between potentially Russia and Ukraine and avoiding war. But, you know, it’s really been kind of a seesaw and a big up and down right now. And because of that, you’re just seeing a lot of movements in the markets. And until this kind of settles itself down and comes to a better resolution, certainly Russia and the Ukraine and specifically Russia is going to be very impactful in the markets that we have here. The second item that’s market moving right now is the Federal Reserve. So, the Federal Reserve has its balance sheet of over $8.2 or $8.4 trillion. That’s mortgage-backed securities and US Treasuries and everyone’s kind of waiting to see what’s going to happen with this. You know, at some point in time, how many are going to start a sell off of the balance sheet? And if they do, certainly that’s going to be impactful on mortgage rates. So, this week we got the Federal Reserve minutes of their last meeting and there was a lot of concerns that they were going to be kind of scary. And the Federal Reserve minutes were not as scary as everyone expected. So, that was really good to see.

Wednesday this week, we’ve got PPI. So, PPI is the Producer Price Index. This measures inflation at the wholesale level. Really a lot of attention was never paid to this report previously. But… you know, the reality is when you have wholesale cost increasing, the companies have to pass this on to the consumers. So, it is inflationary pressure that does get passed on. And on a month-over-month basis, the core rate was up 8/10ths of a percent and still holding at a twelve year high. So, we’re certainly still seeing inflationary pressure. Then we got a CoreLogic rental component. So… for the month of January, rents were up 12%. So, we, kind of, tracked two different places for a rental component. We look at CoreLogic and we’re looking at apartment list. So… for the month of December, you know, CoreLogic says rents are up 12%. The difference with Core Logic, though, is CoreLogic is looking at lease renewals and new leases, whereas apartment list is strictly just looking at brand new leases. So apartment list is saying that rents are up 18% for the year. CoreLogic is lower because renewals are not increasing at the same rate, but still, 12% is an incredibly high number.

Today we get existing home sales. This is for the month of January. Existing home sales were up 6.7%. So, really strong, good report to see. As far as inventory is concerned, inventory from last year was down 16.5%. So, we’re still seeing inventory struggles everywhere certainly in our own local markets here as well. Probably going to remain a struggle throughout the year. Certainly, there’s an imbalance of supply and demand. I wouldn’t say we’re going to see that calm itself down or change anytime soon. I’m available all weekend. If you have any questions, reach out to me any time. If you want to have our strategic buyer consultation, give me a call. If you want to learn about our pre-commitment process how you can close in 18 days, reach out to me and call me, text me, whatever works for you is great. Happy Friday. Have a great day.

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