Thoughts to Ponder . . .
- Age only matters if you are a cheese.
- Sure, I do marathons. On Netflix.
- It takes real skills to choke on air, fall up the stairs and trip over nothing. I have those skills.
- I don’t go crazy, I am crazy. I just go normal from time to time.
- My bed is a magical place where I suddenly remember everything I forgot to do.
And Now on to The Market Update . . .
If you have investments in the stock market through 401K’s, IRA’s, etc…you might want to look at your account balances.
- The Dow jones Industrial Average soared rapidly from the 20,000 mark right through to the next plateau of 21K.
- It is likely that your account balances are going along for the ride and increasing nicely.
- The markets continue to rise as investors are accepting that the Fed is very likely to raise interest rates at the March Fed FOMC meeting.
- The expected move by the Fed is seen as a clear indication that the economy continues to strengthen, and that in the end, so will corporate profits.
Fueling the likelihood of the Fed raising rates is the most recent GDP report released on Tuesday for the 4th quarter of 2016.
- Although the report for this period was little changed from the 3rd quarter, the annualized pace of growth of 1.9 percent is considered stable enough to reinforce the feelings of a strengthening economy.
- In addition, there was a surprising increase on consumer spending which rose .5 percent to an annualized rate of 3.0 percent.
Last week the January report on pending home sales declined unexpectedly by 2.8 percent.
- Although the headline number caught many experts by surprise, looking deeper into the data, the cause is not lack of demand, but more so that inventories are close to historic lows on a national level.
- The hardest hit market is the West in which contract signings were down 9.8 percent from December to January.
- Compared to the same time last year, sales are down 0.4 percent for pending sales on a national level.
The fore mentioned inventory shortage is now beginning to impact home prices.
- The December S&P Case-Shiller Home Price Index showed home prices in the 20-city index increased from November to December by 0.9 percent.
- Compared to the same time last year home prices are up 5.6 percent.
- These are some of the strongest readings we have witnessed in the last year relating to home values rising.
Despite the shortage of housing inventory, mortgage applications for purchases and refinances both jumped 7.0 percent and 5.0 percent respectively.
- The increase in loan activity can be attributed to the recent downward movement in interest rates as well as the typical increase in activity that occurs heading into the spring buying season.
- Although we are still sitting in winter, many parts of the country are experiencing warmer than normal weather, and that can be a stimulus for more activity.
Consumer confidence continues to remain strong.
- The latest report posted a strong gain of 3.2 points from January to February.
- The current reading of 114.8 remains at the highest point since the election.
- The one thing to note is that even though the index is quite high, consumer spending has improved, but not at the same pace.
- That tells us that people feel better about the economy and the future of it, but are continuing to remain cautious with their money.
This week’s potential market moving reports are:
- Wednesday March 8th – MBA Applications and ADP Employment Report
- Thursday March 9th – First Time Jobless Claims
- Friday March 10th – National Employment