QUOTE OF THE WEEK..."To succeed, jump as quickly at opportunities as you do at conclusions." --Benjamin Franklin
INFO THAT HITS US WHERE WE LIVE... Last week's housing reports supported the fact there are great opportunities in today's real estate market, as long as you don't look at just part of the data and jump to conclusions. For example, February Pending Home Sales, measuring contracts on existing homes, were off 0.5% for the month. But wait a second, Pending Home Sales are now UP 13.9% over a year ago!
In the same vein, the S&P/Case-Shiller Home Price Indices slipped a non-seasonally adjusted 0.8% for January and 3.8% from a year ago. But the seasonally-adjusted index of home prices in the 20 largest metro areas was unchanged for the month. And nine of the twenty metros showed price increases! The National Association of Realtors (NAR) expects home prices to rebound in 2012 with existing home sales up 7%-10%, to their highest level in five years.
BUSINESS TIP OF THE WEEK... It's important to listen to your customers to see things from their point of view. But then firmly set their expectations to what you can deliver, so they'll be satisfied at the end. >> Review of Last WeekHIGH-SCORING FIRST QUARTER... We're not talking basketball, just S&P 500 stocks, which ended the week posting their biggest first quarter gain in over a decade, up a very strong 12%. The Dow registered the best first quarter advance in its history, an 8.1% hike. Not to be outdone, the Nasdaq went up almost 19% the first quarter. Experts said that big institutional investors are feeling a little better about the economy and looking to make money in riskier stocks, pushing prices up.
The economic data continues mixed. Personal income and personal spending were up in February, both good things, but inflation was worrisome. Overall prices are up 2.3% the last 12 months, above the Fed's 2% target. University of Michigan Consumer Sentiment was up more than expected, but the Consumer Confidence Index was down. Fed Chairman Bernanke voiced his concerns that job market conditions remain far from normal.
For the week, the Dow ended UP 1.0%, at 13212; the S&P 500 closed UP 0.8%, to 1408; and the Nasdaq went UP 0.8%, to 3092.
Bond prices held steady, as there are still enough economic concerns to keep safe haven buyers participating in the market. The first quarter ended with the FNMA 3.5% bond we watch finishing the week UP .12, at $102.24. After edging up the last two weeks, national average mortgage rates switched direction in Freddie Mac's weekly survey. Mortgage rates remain firmly at historically low levels.
DID YOU KNOW?... According to the NAR, the top 3 approaches first-time home buyers use are: 1) online search for homes; 2) online search for info on the home buying process; and 3) contacting a mortgage lender. >> This Week’s ForecastFED MUSINGS, MARCH JOBS... As the Spring home selling season begins, it could certainly use the support of a healthier jobs market. Tomorrow, the FOMC Minutes from the Fed's March 13 meeting could put some overall economic perspective on the situation. We'll see.
Then Friday, we get the March Employment Report. Unfortunately, no major improvement is foreseen. The modest rate of job creation we've had the last few months should drop a bit, with unemployment still at 8.3%. >> The Week’s Economic Indicator CalendarWeaker 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 Date | Time (ET) | Release | For | Consensus | Prior | Impact | M
Apr 2 | 10:00 | ISM Index | Mar | 53.0 | 52.4 | HIGH | Tu
Apr 3 | 14:00 | FOMC Minutes | 3/13 | NA | NA | HIGH | Tu
Apr 3 | 10:00 | ISM Services | Mar | 56.9 | 57.3 | Moderate | W
Apr 4 | 10:30 | Crude Inventories | 03/31 | NA | 7.102M | Moderate | Th
Apr 5 | 08:30 | Initial Unemployment Claims | 03/31 | 355K | 359K | Moderate | Th
Apr 5 | 08:30 | Continuing Unemployment Claims | 03/24 | 3.355M | 3.340M | Moderate | F
Apr 6 | 08:30 | Average Workweek | Mar | 34.5 | 34.5 | HIGH | F
Apr 6 | 08:30 | Hourly Earnings | Mar | 0.1% | 0.1% | HIGH | F
Apr 6 | 08:30 | Nonfarm Payrolls | Mar | 200K | 227K | HIGH | F
Apr 6 | 08:30 | Unemployment Rate | Mar | 8.3% | 8.3% | HIGH |
>> Federal Reserve Watch Forecasting Federal Reserve policy changes in coming months... Economists expect the Fed to keep the Funds Rate low for quite some time. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%–0.25% After FOMC meeting on: | Consensus | Apr 25 | 0%–0.25% | Jun 20 | 0%–0.25% | Jul 31 | 0%–0.25% |
Probability of change from current policy:
After FOMC meeting on: | Consensus | Apr 25 | <1% | Jun 20 | <1% | Jul 31 | <1% |
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