The 30 year fixed rate is at 6.5% today before adjustments, if any. Typical adjustments are loan-to-value, credit score, escrow waiver, etc. Now be scared.
Mortgage/Economy news:
The Consumer Price Indexes (CPI) were even with expectations, but they are toward the higher side of where the Fed would like inflation to be on a monthly basis. Overall CPI rose .6%, mostly attributed to gas prices. But, core CPI, which excludes food and energy, was up .2%. Investors were not too worried at these levels though, because the stock markets have been up right from the start of trading. We could see technical indicators that foretold this rally, meaning that as long as inflation wasn’t too devastating, buyers were reading to buy. The Dow is up about 120 points, but it does have some resistance on the charts.
More interestingly, the stock markets are holding onto gains following another decline in consumer confidence. The University of Michigan sentiment survey fell from 57.6 to 56.7. The same factors as always have been dragging it lower: high gas prices, slow job growth, and lower consumer spending.
Oil prices have retreated to under $135 per barrel, which might be the reason why stocks and bonds have been able to gain at the same time. Of course, another reason is probably that they have been losing at the same time, which means that there is a lot of money on the sidelines to be invested in both markets. Oil prices fall for a day or two every time it looks like demand might start decreasing. Many airlines are saying they will offer fewer flights, charge small fees for previously included amenities, like free baggage checking or soda on the plane. Dipping consumer confidence would also lead speculators to believe that people might need to spend less money on gas.
It has been an interesting mix of data and news this morning. So far, it is working to the advantage of stocks and bonds. Usually one or the other will take control at some point though. It is possible that both markets could sell off later in the day as we go into the weekend. However, if either market makes gains going into closing today, that should carry over to next week.
Thought of the day:
Tenderness and kindness are not signs of weakness and despair, but manifestations of strength and resolutions.
Kahlil Gibran
1883-1931, Lebanese Poet, Novelist
(Provided by Steve Hale~Georgia Platinum Mortgage)
