Market Snapshot | March 26th | Darel Ansley | People's Bank
March 26, 2018 | Jeff Hallman
For the week of March 26, 2018 — Vol. 16, Issue 13
>> Market Update
QUOTATION OF THE WEEK..."All generalizations are false, including this one." --Mark Twain, American writer, humorist, entrepreneur, publisher and lecturer
INFO THAT HITS US WHERE WE LIVE... After heading down two months in a row, Existing Home Sales flew back up in February, increasing 3.3%, to a 5.54 million annual rate. Demand remains strong: 46% of homes sold in less than a month.
New Home Sales were flat in February, off just 0.6%, to a 618,000 annual rate.  They're still up 0.5% from a year ago, and there's plenty of room for growth: new homes are only 10% of sales, versus 15% before the downturn.
Zillow reports the median monthly rent bumped to $1,445 in February, gaining at the fastest rate in nearly two years. Expect more renters to become buyers.

BUSINESS TIP OF THE WEEK...  Try to be all things to all people and you wind up motivating no one. Target an audience and tell them how you meet their special wants and needs. Go niche and get rich. 
>> Review of Last Week

TRIPLE PLAY... The major stock indexes tumbled, as three big items came into play: 50 million Facebook users had their data mined without their consent, t he Fed raised the Funds Rate a quarter point, and the President allowed for tariffs on Chinese goods. 
The Facebook scandal incited cries for greater data regulation, which could hurt social media company profits. But t he rate hike was expected, and came with the good news that the economic outlook has strengthened.
Trade war worries escalated, even though initial salvos were relatively weak--tariffs on $60 billion of Chinese imports, answered by up to $3 billion in duties on U.S. imports over there. Some say this is just The Art of the Deal, but investors hate not knowing the outcome.
The week ended with the Dow down 5.7%, to 23533; the S&P 500 down 6.0%, to 2588; and the Nasdaq down 6.5%, to 6993.

Tanking stocks did not send lots more investors into bonds, though Treasuries finished the week mostly higher. The 30YR FNMA 4.0%, bond we watch ended the week unchanged, at $102.36. After falling the prior week, national average  30-year fixed mortgage rates  held steady in  Freddie  Mac's latest Primary Mortgage Market Survey Remember, mortgage rates c an be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?...First American reports, "given today's strong economy, our housing market is well positioned to adopt to rising mortgage rates." If mortgage rates doubled overnight, their computer model posits "a mere 5% decrease" in sales.
>> This Week's Forecast
UP GO PENDING HOME SALES, GDP, CONSUMER SPENDING, INFLATION, MANUFACTURING ...  The experts say Pending Home Sales should show a February turnaround, foretelling a gain in existing home sales a few months out. They also expect GDP economic growth, Personal  Spending and Core PCE Prices (inflation) to head up, as well as the Chicago  PMI gauge of Midwest manufacturing.
>> 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 Mar 26 - Mar 30
Date Time (ET) Release For Consensus Prior Impact
Tu
Mar 27
10:00
Consumer Confidence Mar
129.5 130.8 Moderate
W
Mar 28
08:30
GDP - Third Estimate Q4 2.6% 2.5% HIGH
W
Mar 28
10:00 Pending Home Sales Feb 2.5% -4.7% Moderate
W
Mar 28
10:30
Crude Inventories 03/24 NA -2.62M Moderate
Th
Mar 29
08:30
Initial Unemployment Claims
03/24
230K 229K Moderate
Th
Mar 29
08:30
Continuing Unemployment Claims
03/17
NA 1.828M Moderate
Th
Mar 29
10:00 Personal  Income Feb
0.4% 0.4% Moderate
Th
Mar 29
08:30
Personal Spending Feb
0.2% 0.2% HIGH
Th
Mar 29
08:30
Core PCE Prices Feb
0.2% 0.3% HIGH
Th
Mar 29
09:45 Chicago PMI Mar 62.0 61.9 HIGH
Th
Mar 29
10:00 U. of Michigan Consumer Sentiment - Final Mar 102.0 102.0 Moderate

>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months... Now that the Fed did its first hike of the year, the next one isn't expected until June. But that one should hold through August at least. Note: In the lower chart, a 2% probability of change is a 98% certainty the rate  will stay the same .
Current Fed Funds Rate: 1.25%-1.50%
After FOMC meeting on: Consensus
May 2 1.50%-1.75%
Jun 13 1.75%-2.00%
Aug 1 1.75%-2.00%
 
Probability of change from current policy:
After FOMC meeting on: Consensus
May 2          2%
Jun 13        80%
Aug 1
       25%
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