Danny Salas

Chico, CA Interest Rates Market Report – Economic Influences – September 1, 2009

September Stock Blues

Calm Before The Storm

Mortgage-Backed Securities are bouncing back and forth, between the 100-Day and 200-Day Moving Averages.  I think they’re poised move in a higher direction, making rates lower for September and October.  Here’s why!

Stock Market

To put it simply, Stocks are overbought, we’re heading for September, AND we’re getting ready to receive the 3rd Quarter Earnings Reports from U.S. Corporations.  As I have been saying to a lot of my clients and agents, I think it’s going to be ugly.  The good news…interest rates will benefit. September stock months have, traditionally, been bad since 1959.  So, if tradition has anything to do with anything…

July Pending Sales

Pending Homes Sales for July increased by 3.2%.  They only expected a 1.5% increase, not to mention that we’ve experienced six months of increases.  Don’t get too overly excited.  Remember, many first time home buyers are moving their purchases up to take advantage of the tax benefits this year.

Read Between the Lines

The Institute for Supply Management Index (ISM) came in at a very strong 52.9%.  Generally, a reading over 50% indicates strong economic growth, because it measures manufacturing output.  But reading between the lines, you’ll take notice that Manufacturing has been slow.  Since 2007, corporations have depleted their supply of goods, as opposed to the cost manufacturing new ones.  So, since the supply has depleted, manufacturing has to go up.  So, watch this carefully.  It could be misleading!

Continue to Float

So, I would continue to float, very cautiously, into the third quarter.  It’s benefited numerous of my clients this past few weeks.

This entry was posted on Tuesday, September 1st, 2009 at 5:29 pm and is filed under Chico Home Loans, Home Buying, Interest Rates, Loan Qualification, Weekly Market Report. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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