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Friday Market Update for the Week of January 22nd

Happy Friday, Brian Manning here with the weekly update. Let’s get right to it.

So, Monday of this week, markets were closed for Martin Luther King day. Tuesday of this week we had Janet Yellen giving her first speech. Janet Yellen is the incoming treasury secretary and Janet Yellen says that this $1.9 trillion package that president Biden is proposing is good but it’s not enough and that the US economy is going to need more stimulus than that. Certainly, Janet Yellen is going to be one of the most influential people brought into this cabinet and we’re going to have to watch her closely because she is definitely going to have a rather significant impact on the US economy with what she’s doing, so let’s keep an eye on Janet Yellen. She’s certainly one we were watching before when she was the president of the Federal Reserve and now she’s back again and we love to see it.

 

Also we had stocks just continuing going on fire but what’s interesting is that the CitiGroup euphoric index is at an all-time high. So this index measures how excited investors are and it’s at an all-time high which is just unbelievable and if you watch the stock markets, they just keep going up and up and up. So, you know, if we look at history, we’re going to talk about this more in just a few minutes but you know, historically, history is going to show us that you know, after you have big run-ups eventually there’s ought to be a crush in some place. So we’ll wait and see what happens. Wednesday of this week we got president Biden and the inauguration which was just a really wonderful inauguration to see and you know, I think it’s just amazing to see that there is a goal right now of 100 million vaccines in 100 days. Even if they don’t hit that, that’s okay. You know, here we are in the US economy with 10 million unemployed people so certainly all this work and effort in getting vaccines out there and if there was a possibility of vaccinating 100 million people certainly everyone in this US economy would really benefit from that, so good to see what they’re trying to do there. Also this Wednesday and every single Wednesday we get mortgage applications but if we look at purchase on a year-over-year basis purchase applications, so this is new people applying for a mortgage, on a year-over-year basis is up 15%. So unbelievable just to continue seeing the strength in housing.

Thursday of this week, we got housing starts, so this is all from new construction builders. So we had housing starts and it showed us that on a month-over-month basis single family residence were up 12%. Now, on a year-over-year basis though housing starts were up 28%. So, builders trying to keep up with this demand and you know, the inventory across the border is down significantly and builders just doing everything they can.

Also every Thursday we get unemployment and new unemployment claims. This is new people filing for unemployment for the first time down slightly, but it was still at 900,000 people filing for new unemployment claims. We talked about this last week but, you know, pre-pandemic we were running around 200,000 people per week and we’re at 900,000. So still, very high numbers. Today Blockbuster report, existing home sales on a month-over-month basis, existing home sales for the month of December were up 7/10th of a percent. On a year-over-year basis existing home sales up 22%. Just phenomenal blockbuster report, just still showing all the strength in the housing market and just another updated inventory with existing home sales. Existing home sales show that inventory was down 22%. So mortgage applications up, existing home sales up, inventory is down, everything is just leading into a really strong market.

One thing I want to do today is just show you some information on some charts. And I’m just doing this to start giving some more feedback on what’s happening with interest rates, so what we’re starting with here is just a yield on the 10-year treasury, mortgage rates will typically go congruently with what the yield on the 10-year treasury is doing. So we saw mortgage rates rise for several days and they’ve just kind of gotten flat. So we’ll just have to wait and see what happens but they have been pretty much flat for several days.  The key indicator we want to watch here is going to be stocks,if we’re looking at stocks right now we have seen stocks run up very high, my chart is not working right now but we saw stocks run up very high and right now, they’re kind of at this ceiling and we can see it here. So, if we start to see a turnaround in stocks so we’re starting to see a decline in the stock market. Typically what’s going to happen is money is going to leave stocks and move into bonds and that’s going to benefit interest rates. So let’s keep a close eye on the stock market and see what happens.

I’m around all weekend, if you have any questions, let me know. If you want a pre-approval, need some updated fees, or just have any questions about the home buying process, refinancing, give me a call. I’d love to help you in any way I can. Happy Friday, have a great day!

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