Have I Got the Indicator for You!

There is about a 33% chance that the FOMC will raise rates at this month’s meeting.  That’s the highest probability we’ve seen since the start of 2016.  Tomorrow’s Jobs Report will go a long way in determining if that really happens or not.  Several Fed Governors are calling for the hike and even Janet Yellen was convincingly hawkish in her remarks in Jackson Hole last weekend (chalk it up to the fresh air and abundant wild life?).  We’ll see tomorrow.  And right about the time that the closing bell rings today, we’ll get the report on yearly Automotive Sales, which has steadily increased for the last five years.  It’s not considered a market mover but it’s one of my favorite because I like cars.

Ahead of the Jobs Report we have a few hints into the employment picture: Challenger, Gray & Christmas show that Job Cuts fell 29% over the last 12 months, ADP shows a 9% decline in hiring from last month, and Jobless Claims are up 1% just this week.

New Home Sales Up Big.

New Home Sales come in at 504,000 annualized units, way above the 435,000 expected by Wall Street. New Sales jumped 18% in August (the largest increase in over 22 years), and have increased 33% from a year ago!  The median price of said new home is now at $276,600, and increase of 8% over this time in 2013.  So far this morning the markets don’t know which way to react; stocks and bonds have whip-sawed back and forth in early trading. Thirty year FHA loans are at 3.5% and Conventional loans are at 4.125%. Fifteen year rates are way lower at 3.0% (APR will be higher, depending on the loan and down payment amounts, and amortization term–as closing costs and the presence of mortgage insurance affect each loan differently.)