Market Snapshot | Feb. 5, 2018 | Darel Ansley | People's Bank
February 5, 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 5, 2018 — Vol. 16, Issue 6
>> Market Update 
QUOTATION OF THE WEEK... "When I was born, I was so surprised I didn't talk for a year and a half." --Gracie Allen, American comedian
INFO THAT HITS US WHERE WE LIVE... The National Association of Realtors (NAR) reported Pending Home Sales rose in December for the third month in a row, ending 0.5% ahead of a year ago. This index of contracts signed on existing homes foretells sales gains a few months out.
The NAR's chief economist predicts existing home sales will hit 5.54 million units in 2018:  "the larger paychecks most households will see from the tax cuts...and the healthy labor economy and job market will continue to boost demand." But tight inventories in many markets remain a concern
The Census Bureau reports homeownership in Q4 reached its highest level in three years. Zillow's Senior Economist feels "after bouncing around near 50-year lows for the past few years, the national homeownership rate finally seems to be gaining sustainable momentum."
BUSINESS TIP OF THE WEEK...  Prospects care more about their needs than your qualifications. Get them talking about their hopes and dreams. Then say how you'll help achieve them.
>> Review of Last Week

GOOD NEWS IS BAD NEWS... The bad news was stocks tanked, but that was blamed on the good news of the January jobs report. A better-than-expected 200,000 jobs were added, and average hourly earnings (wages)  are now up 2.9% year-over-year, the highest growth rate since 2009. 
Unfortunately, this wage growth can also drive up inflation, which could encourage the Fed to do more than the two additional rate hikes expected this year.  Who knows. Some felt the big stock selloff was just a normal correction in a market that's come a little too far a little too fast.
More evidence of a faster growing economy came with Personal Income AND Spending up nicely in December, with Core PCE Prices, the Fed's favorite inflation read, still a ways from their 2% target. And University of Michigan Consumer Sentiment on the economy remains high. 
The week ended with the Dow down 4.1%, to 25521; the S&P 500 down 3.9%, to 2762; and the Nasdaq down 3.5%, to 7241.

Bonds headed south from the same inflation concerns that hurt stocks. The 30YR FNMA 4.0% bond we watch fell by .73, to $102.83. In  F reddie Mac's latest Primary Mortgage Market Survey, national average  30-year fixed mortgage rates edged up. Remember,   mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?... A recent survey reports 67% of Americans expect their finances to improve in 2018. Millennials were the most optimistic demographic, with 79% seeing financial improvement.

>> This Week's Forecast
SERVICES, TRADE DEFICIT BOTH UP ... We're taking a breather from last week's avalanche of reports, with just a few bits of data worth watching. The ISM Services index is expected to show continued growth for the sector of the economy creating the most jobs. We'd rather not see growth in our Trade Balance deficit, but it looks like imports will keep besting exports.
>> 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 5 - Feb 9
M
Feb 5
10:00
ISM Services Jan 56.7 55.9 Moderate
Tu
Feb 6
08:30
Trade Balance Dec
-$52.3b -$50.5B Moderate
W
Feb 7
10:30 Crude Inventories 02/03
NA 6.8M Moderate
Th
Feb 8
08:30
Initial Unemployment Claims
02/03
236K 230K Moderate
Th
Feb 8
08:30
Continuing Unemployment Claims
01/27
NA 1.953M Moderate

>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months... A March rate hike is expected, then no move in May, but another quarter percent bump in June. Note: In the lower chart, a 78% probability of change is a 78% 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
       78%
May 2
       26%
Jun 13
       64%

 
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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