"Anyone who does not believe in miracles is not a realist."--David Ben-Gurion, first Prime Minister of Israel
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NATIONAL MARKET UPDATE
While we wait for our miracle, the index of contracts signed on existing homes, Pending Home Sales rose 2.4% in February, up now two months in a row. This bodes well for existing home sales closing in March and April.
The National Association of Realtors chief economist says the spring buying peak will be delayed, not canceled: "people who are staying home right now, once the all-clear signal is given, will be going back into the market."
Freddie Mac's chief economist noted, "homebuyer demand has declined in response to current economic conditions," but "stimulus is on the way and will provide support for both consumers and businesses."
REVIEW OF LAST WEEK
BEST WEEK SINCE 2008... Last Monday's headline was identical except for "worst" instead of "best" but, hey, the stock market's been volatile. The S&P 500 posted its best weekly gain since 2008, the Dow its best since 1938!
Friday, the President signed an unprecedented $2.2 trillion stimulus package for workers and businesses, small and large, to survive the coronavirus slowdown. The National Ass.
Mortgage rates stabilized after the Fed announced there would be no limit to its bond buying program to shore up the economy. That includes purchasing mortgage-backed securities, which should keep bond prices up and rates down.
The week ended with the Dow UP 12.8%, to 21,637; the S&P 500 UP 10.3%, to 2,541 and the Nasdaq UP 9.1%, to 7,502.
Bond prices gained, boosted by the Fed's dialed up bond buying. The UMBS 4.0% ended UP 2.45, to $105.84. For two weeks in a row, the national average 30-year fixed mortgage rate fell in Freddie Mac's 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?... In addition to Fannie Mae and Freddie Mac, the FHA and VA are now easing standards for property appraisals and verification of employment on some loans. Please contact us for specifics.
THIS WEEK'S FORECAST
WHOLESALE PRICES STEADY, JOBLESS CLAIMS RISE, NO SURPRISE... The Consumer Confidence drop for March but stay well above a decent 100. other reports show contraction: Pending Home Sales, the ISM Indexes for manufacturing and services, and March Nonfarm Payrolls, though Hourly Earnings grow.
Bond markets will close at 2 p.m. on Maundy Thursday. All financial markets will be closed on Good Friday.
NOTE: Weaker economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and higher loan rates.
FEDERAL RESERVE WATCH
Forecasting Federal Reserve policy changes in coming months... Predicting the Fed rate has gotten easy. We're at the lowest range, and no one sees central bankers moving until the coronavirus threat passes and the economy turns back up. Note: In the lower chart, a 0% probability of change is a 100% certainty the rate will stay the same.
Current Fed Funds Rate: 0%-0.25%
AFTER FOMC MEETING ON:
Probability of change from current policy:
AFTER FOMC MEETING ON:
BUSINESS TIP OF THE WEEK
Working from home, watch the electric bill. Electronics still sap power in standby mode. When not in use, unplug PCs, laptops, printers, etc. Only use LED bulbs. Put all food and drink in one fridge and unplug other fridge, freezer, or wine cooler. Clean dryer vent to keep dust from over-working the air conditioning.