We have been in a fairly long-term trend in which signs of recovery are accompanied by higher stock prices, higher oil prices and higher interest rates. In other words, when the stock market rallies, the bond market weakens. Though this may be true on a day-to-day basis, if we look closely at the trend, it has been broken. A few months ago we mentioned that this trend must be broken because high rates would choke off a fragile recovery. And now it may have happened. Let’s look at the evidence. On Thursday of last week the Dow was approaching 9850 or close to its high for the year and pretty close to a 12-month high as well. With regard to rates, though the yield on the 10-year note is up a full percentage point from the low hit during the height of the financial crisis almost one year ago, it is down significantly in the past three months. Even more importantly, rates on home loans again hit the historic lows reached earlier this year before bouncing back on Friday.
Why is this happening? For one the Federal Reserve Board continues to purchase mortgages and this is supporting rates on home loans. With regard to the markets it is hard to say why they act as they do. It seems that every time the stock market starts to correct after its long run, it rebounds. Last week we had good news on initial unemployment claims which seemed to assuage some of the fears produced by the weak employment report released for last month. Otherwise the data was light and we are expecting more activity and reaction to data this week such as retail sales and consumer inflation.
Meet Kurt Galitski - The Kurt Real Estate Group,
your new best friend.
Distinctive Strategies that Deliver Record-Setting Results.
When you combine Kurt’s passion and knowledge of the real estate market, you really gain an appreciation for what makes Kurt different. But what truly sets him apart from the crowd are his 5 distinctive strategies and his property management… For Kurt, getting into real estate was not an accident, it was a deliberate and calculated decision to deliver a better experience to home buyers, sellers, and landlords that they have ever received before. Today, you could ask any one of hundreds of clients, read his Yelp reviews, or look at his track record of being featured in Orange Coast Magazine in excess of eight consecutive years and you too will say mission accomplished.
www.KurtRealEstate.com
www.KurtPropertyManagement.com
877-957-6677
The Spreads Change Again
