Market Update For the Week of March 19, 2018

Market Update For the Week of March 19, 2018

Info That Hits Us Where We Live

After a spectacular January, Housing Starts took a break in February, dipping 7.0%, to a 1.236 million annual rate, all due to multi-families. Starts are still close to a post-recession high, single-family starts up 2.9% for the month and 2.9% for the year.

Building Permits also fell for the month, but gained for the year, 4.6% for single-families, 10.6% for multi-families. So the future looks bright, with the National Association of Home Builders sentiment index historically high, though it slipped slightly for the month.

The National Association of Realtors (NAR) reports that in 2017, 34% of all home purchases were made by Millennials, giving that generation the highest share of home buyers five years in a row. They’re also the most likely group to purchase through an agent.

Business Tip of the Week

To stand out as an expert, really dig into what you need to know. If you just scan the headlines, you’ll only get what everyone else does–an incomplete story, missing important details. Take the time to digest all the info you can.

Review of Last Week

UP FINISH TO A DOWN WEEK… A volatile week on Wall Street ended with the three major indexes down, although Friday’s economic data sent stock prices back up. Trade war worries and personnel changes at Secretary of State and chief economic adviser to the president drove the sell off.

Good economic reports included Industrial Production rising at its fastest pace in four months, while University of Michigan Consumer Sentiment shot up to a 14-year high, its 102 reading well above the long-term average of 86.

Small business optimism is at its second highest lever ever, and the CEO Confidence survey hit 63, well into positive territory above 50. Even a dip in Retail Sales was positive, showing the economy isn’t so hot that the Fed will need more than three planned rate hikes this year.

The week ended with the Dow down 1.5%, to 24947; the S&P 500 down 1.2%, to 2752; and the Nasdaq down 1.0%, to 7482.

For the most part, it was prices down, yields up in the bond market, hinting rates may rise. The 30YR FNMA 4.0%, bond we watch ended the week down .02, at $102.36. But national average 30-year fixed mortgage rates actually fell for the first time in 2018 in Freddie Mac’s latest Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

Did You Know?

J.D. Power reports that 2017 was the first year purchase and refinance customers cited online/website as the most frequent method of submitting a mortgage application.

This Week’s Forecast

NEW AND EXISTING HOME SALES GROW, THE FED TAKES A HIKE… Analysts say we’ll see Existing Home Sales inch toward the 5.5 Million annual rate, and New Home Sales back over 600,000 per year. Almost everyone expects the Fed to take a quarter percent hike in their FOMC Rate Decision.

The Week’s Economic Indicator Calendar

Weaker 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 19 – Mar 23

DateTime (ET)ReleaseForConsensusPriorImpact
W
Mar 21
10:00Existing Home SalesFeb5.42M5.38MModerate
W
Mar 21
10:30Crude Inventories03/17NA+5.0MModerate
W
Mar 21
14:00FOMC Rate DecisionMar1.50%- 1.75%1.25%- 1.50%HIGH
Th
Mar 22
08:30Initial Unemployment Claims03/17225K226KModerate
Th
Mar 22
08:30Continuing Unemployment Claims03/10NA1.879MModerate
Th
Mar 22
10:00Leading Economic Index (LEI)Feb0.5%1.0%Moderate
F
Mar 23
08:30Durable Goods OrdersFeb1.5%-3.7%Moderate
F
Mar 23
08:30Durable Goods Orders – ex transportationFeb0.6%-0.3%Moderate
F
Mar 23
10:00New Home SalesFeb620K593KModerate

 

Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… The Fed futures market sees a quarter percent rate hike this Wednesday, nothing in May and then another quarter percent increase in June Note: In the lower chart, a 94% probability of change is a 94% certainty the rate will move higher.

Current Fed Funds Rate: 1.25%-1.50%

After FOMC meeting on:Consensus
Mar 211.50%-1.75%
May 21.50%-1.75%
Jun 131.75%-2.00%

 

Probability of change from current policy:

After FOMC meeting on:Consensus
Mar 21       94%
May 2       11%
Jun 13       70%

Statistics source: www.markettrends.com

Material in this article from: Inside Lending Market Snapshot

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