Got Grease?

More conflicting opinions out today.  Stocks rallied yesterday on investor hopes that the current slowdown will spark a slew of stimulus packages and bailouts around the world to grease the wheels of international currency flow.  However, private analysts and Fed Governors alike have spoken out this morning about a decreased risk of a global recession.  Perhaps they too are already calculating in a little help from friends?

Ahead of Friday’s Bureau of Labor Statistics (BLS) Jobs Report, the ADP Report out this morning shows 214,000 new jobs were created last month.  That’s 24,000 more than expected, and 22,000 more than last month’s total.  The BLS report is also anticipating 190,000 new jobs reported, which would be an improvement of 47,000 over February’s calculation.

In Like a Lion

One thing that many people don’t know about me is that I started college as a fine arts major and actually received a degree in that subject.  Aside from doodling to stay awake in church, I haven’t pursued drawing or painting for a very long time.  Sometimes though I run across a painting or a photo or even a song that captivates my attention and then speaks to my soul.  I think that’s human nature, inherent to most people and not exclusively birthed during the two years spent on the third floor of the Spori Building of Rick’s College.

When I read about the market volatility this morning and my grade-school children reminded me that it was March 1st, I immediately thought of how the month comes in like a lion and out like a lamb.  Here are some lion-ish factors to the downside of economic growth published today: Federal Reserve Bank of New York President William Dudley commented that he is less confident than he was before and sees the U.S. economic outlook tilting to the downside.  The ISM Survey (a lion in its own right as the king of manufacturing indices) still shows a negative outlook for the production and fabrication sector.

The positives for growth are Core Logic reporting a 6.9% year-over-year rise in home prices since this time last year, and the Fed Fund Futures now showing a 52% chance of a rate hike by the end of 2016.  The Futures sentiment has been fickle as of late and flies in the face of Mr. Dudley’s statements this morning. All the same, 52% is essentially a coin toss.  We welcome with open arms the continued, measured, price increases noted in the housing markets across the country.

Buy now, or pay more later

“The U.S. economy is still considerably short of the two goals assigned to the Federal Reserve by the Congress” of low and stable inflation and maximum sustainable employment.”” –Janet Yellen.  That statement by the Chair of the Federal Reserve yesterday sent Stock and Bond prices up in the late afternoon.  But Bonds are at the top of a falling channel, meaning that mortgage interest rates are rising if they don’t break out here.

CoreLogic reported that home prices rose 0.8% from January to February, and 12.2% since last February.  This month marks the 24th consecutive month for price increases.  This is great information to pass on to your clients who are putting off buying a home.  That same house will cost them a lot more money this time next year.