Friday Market Update: February 25th 2022 with BRIAN MANNING

Happy Friday! Brian Manning here with the weekly update. Let’s get right to it. So, Monday this week we had a quiet news day. It was Presidents’ Day. Financial markets were closed. Tuesday this week, we got a report from Case-Shiller. So, Case-Shiller gives us feedback on the housing market on a month-over-month and year-over-year basis. So, for the month of December, housing market appreciated 9/10ths of a percent, which is still insane and such a high number. And on a year-over-year basis, housing appreciation was up 18.8%. So… Just insane to see the continued appreciation that we’ve had. You know, the question is, will it continue into this year? You know, it’s probably going to remain really strong because there’s just still an imbalance of supply and demand. So, we have to see how this year unfolds. But… We do predict really solid appreciation this year as well.

Thursday this week, just unfortunately, rather sad day, you have the invasion of Russia into Ukraine. You know, I don’t even know what the Federal Reserve is going to do now, how they’re going to handle this. They really misjudge inflation. They should have hiked rates last year, in all last year and especially from the middle to the end of last year. They just said inflation was transitory. They did nothing about it. And then here we are with extremely hot inflation. Now, you got turmoil in the financial market. So… You know, I don’t know how they’re going to manage their moves there, but they really have put themselves into a tough position by lack of any Fed rate hikes last year. So… We’ll have to wait and see.

Today the big market movers are, you have Russia coming out and saying they’re willing to talk with Ukraine. But if you look at the details, Russia is basically saying, hey, we’re willing to talk with you if you put your guns down and then you just want to listen to what we want. So… You know, had a little bit of a movement in the market at first, but when you really look at the details, not as impactful as one would hope it could be. And then today we also get the PCE. So, PCE is Personal Consumption Expenditure. This is actually the Federal Reserve’s favorite gauge of inflation. We don’t really think it is because it doesn’t include costs for out of pocket medical expenses and out of pocket housing expenses. But… PCE for the month of January, the core rate. So, this strips out volatile items such as food costs and energy costs. The month of January was up to half a percent. And on a year-over-year basis, the core rate was up 5.3%.

So… The hottest number for inflation in 39 years. Absolutely, the Federal Reserve has to do something in March. You know, there’s some uncertainty now. You have a couple of voting members that want to do a half a percent rate hike in March. Now, with the war in Ukraine, some are a little bit more conservative looking at a quarter percent rate hike. So, we’ll have to see how that unfolds but certainly going to see some kind of rate hike here coming up in the month of March. You know, our feeling as well is that probably next month, we’re going to probably hit peak inflation. So… You know, next month, it will be interesting to see what the reading is and if you get peak inflation, you get some fed rate hikes. What that’s going to do to help calm things down remains unknown but that’s kind of what we’re predicting to see. Let’s see. I’m around all weekend. If you have any questions, let me know. Call me on my cell phone. Text me. You want to go through our strategic buyer consultation, reach out to me. If you want to learn about our precommitment process and how we can close your purchase transaction in 18 days, give me a call. I’d love to help you in a way I can. Happy Friday. Have a great day.