Market Snapshot | Feb. 16, 2018 | Darel Ansley | People's Bank
February 16, 2018 | Jeff Hallman
Inside Lending
 
 
 
 
  Darel Ansley  Darel Ansley
Senior Real Estate Loan Officer
NMLS# 500247
901 North Mission Street
Wenatchee, WA 98801 Office: (509) 664-5324
Mobile: (509) 860-3301
Fax: (509) 664-5315
darel.ansley@peoplesbank-wa.com
www.peoplesbank-wa.com/darel
  Peoples Bank  
 
For the week of February 12, 2018 — Vol. 16, Issue 7
>> Market Update 
QUOTATION OF THE WEEK... "The secret to staying young is to live honestly, eat slowly and lie about your age." --Lucille Ball, American comedian, actress and producer
INFO THAT HITS US WHERE WE LIVE... The Fannie Mae Home Purchase Sentiment Index (HPSI) rose in January to a new all-time high. More people say that now is a good time to buy and a good time to sell, home prices should rise and mortgage rates fall, and job loss isn't a concern.
Supporting this, the National Association of Realtors (NAR) latest Housing Opportunities and Market Experience (HOME)  survey reports 72% of respondents think now is a good time to buy and 71% think now is a good time to sell, "good news for possible inventory gains heading into 2018." 
The NAR's chief economist feels, "housing demand in 2018 will be fueled by more Millennials finally deciding to marry and have kids, and the expectations that solid job growth and the strengthening economy will push incomes higher." Pretty good, that.
BUSINESS TIP OF THE WEEK...  Business coaches advise that to get more done, you should design your day. Write down a schedule of what you'll do and when you'll do it. Then stick to it.
>> Review of Last Week

ROLLER COASTER DOWN... If you like wild rides, you would have loved the one investors took last week. The Dow fell steeply (1,000 points) on two different days, then climbed back up Tuesday and Friday, though not enough to keep the major indexes positive for the year.
We heard lots of yak that the stock drop was caused by fears of higher inflation and more short-term rate hikes from the Fed. OK. But  those concerns come from the expectation of stronger economic growth, which ultimately is good for stocks.  
Many experts called this a "correction" after stocks shot up 7.5% the first four weeks of 2018 following last year's 19.4% surge. They say there's little concern for housing or the economy , with more Americans working than ever, the highest inflation-adjusted wages and near historically low interest rates.
The week ended with the Dow down 5.2%, to 24191; the S&P 500 also down 5.2%, to 2620; and the Nasdaq down 5.1%, to 6874.

Bonds were kept in check by concerns over more federal spending. The 30YR FNMA 4.0% bond we watch fell .28, to $102.55. National average  30-year fixed mortgage rates hit their highest level since December 2016 in  F reddie Mac's latest Primary Mortgage Market Survey , but "initial readings indicate housing markets are sustaining their momentum so far." Remember,   mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?... A recent poll says 9 out of 10 lenders expect to lend more in 2018 than in 2017. The Mortgage Bankers Association forecasts $1.18 trillion in purchase mortgages this year.

>> This Week's Forecast
HOME BUILDING AND INFLATION  UP,  RETAIL AND MANUFACTURING GROW ... Returning to a feast of economic data, we should see a tasty Housing Starts number, up for January. Not so tasty is the predicted move up for inflation measured by the Consumer Price Index (CPI). But Retail Sales, along with Philadelphia Fed Index manufacturing, are expected to keep cooking, just at a slightly slower pace
>> 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 Feb 12 - Feb 16
M
Feb 12
14:00
Treasury Budget Jan $51.0B $51.3B Moderate
W
Feb 14
08:30
Consumer Price Index (CPI) Jan
0.4% 0.1% HIGH
W
Feb 14
08:30
Core CPI Jan
0.2% 0.3% HIGH
W
Feb 14
08:30
Retail Sales Jan
0.2% 0.4% HIGH
W
Feb 14
08:30
Retail Sales ex-auto Jan
0.4% 0.4% HIGH
W
Feb 14
10:00
Business Inventories Dec 0.3% 0.4% Moderate
W
Feb 14
10:30 Crude Inventories 02/10
NA 1.9M Moderate
Th
Feb 15
08:30
Initial Unemployment Claims
02/10
227K 221K Moderate
Th
Feb 15
08:30
Continuing Unemployment Claims
02/03
NA 1.923M Moderate
Th
Feb 15
08:30
Producer Price Index (PPI) Jan
0.4% -0.1% Moderate
Th
Feb 15
08:30
Core PPI Jan
0.2% -0.1% Moderate
Th
Feb 15
08:30
NY Empire Manufacturing Index Feb 19 17.7 Moderate
Th
Feb 15
08:30
Philadelphia Fed Index Feb 22.0 22.2 HIGH
Th
Feb 15
09:15 Industrial Production Jan
0.2% 0.9% Moderate
Th
Feb 15
09:15
Capacity Utilization Jan
78.0% 77.9% Moderate
F
Feb 16
08:30
Housing Starts Jan
1.240M 1.192M Moderate
F
Feb 16
08:30
Building Permits Jan
1.300M 1.302M Moderate
F
Feb 16
10:00
U. of Michigan Consumer Sentiment - Prelim Feb 95.5 95.7 Moderate

>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months... Some say recent stock market volatility could restrain the Fed, but the futures market still sees a quarter percent rate hike in March, and another in June. Note: In the lower chart, a 72% probability of change is a 72% certainty the rate  will move.
Current Fed Funds Rate: 1.25%-1.50%
After FOMC meeting on: Consensus
Mar 21
1.50%-1.75%
May 2
1.50%-1.75%
Jun 13 1.75%-2.00%
Probability of change from current policy:
After FOMC meeting on: Consensus
Mar 21
       72%
May 2
       31%
Jun 13
       58%

 
This e-mail is an advertisement for Darel Ansley. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in this message is the property of Peoples Bank and cannot be reproduced for any use without prior written consent. This message is intended for business professionals only and is not intended for distribution to consumers or other third parties. The material does not represent the opinion of Peoples Bank.
 
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