For the week of April 2, 2018 — Vol. 16, Issue 14 >> Market Update QUOTATION OF THE WEEK..."A two-year-old is kind of like having a blender, but you don't have a top for it." --Jerry Seinfeld, American stand-up comedian, actor, writer, producer and director INFO THAT HITS US WHERE WE LIVE... The spring buying season started off nicely, as Pending Home Sales reversed course and went up 3.1% in February. This measure of contracts on existing homes indicates more closed sales ahead. The National Association of Realtors (NAR) chief economist noted, "the expanding economy and healthy job market are generating sizable homebuyer demand." But supply is tight and prices are up in many markets. Those higher prices have given homeowners record amounts of home equity, according to Freddie Mac's Outlook. And that may help supply, as the NAR HOME Survey found that more homeowners believe now is a good time to sell! >> Review of Last Week But stock prices over the long term are driven by growth in the economy and corporate earnings, and many analysts say those look positive. Final Q4 GDP came in at 2.9%, pegging economic growth near 3% for the third month running. Personal Income rose for the second month in a row and Initial Unemployment Claims fell to their lowest level since 1973. No wonder University of Michigan Consumer Sentiment remains at its highest level in 14 years. The week ended with the Dow UP 2.7%, to 24143; the S&P 500 UP 2.1%, to 2642; and the Nasdaq UP 1.0%, to 7063. DID YOU KNOW?... A new study reveals Millennials are the most rent burdened generation, spending about 45% of income and paying close to $100,000 on rent before they reach 30. >> This Week's Forecast BUZZING FACTORIES , MORE JOBS, HIGHER WAGES... The ISM Index should stay well above the growth threshold of 50, indicating U.S. factories kept humming in March. The jobs market is getting healthier too. Analysts see new Nonfarm Payrolls just below 200,000, and wages up 0.2% by the Hourly Earningsmeasure. >> 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 Apr 2 - Apr 6
Forecasting Federal Reserve policy changes in coming months... The Fed Futures market sees rates staying where they are in May, but expects the second hike of the year in June. 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%
Probability of change from current policy:
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