Danny Salas

Archive for September 15th, 2009

Chico, CA Interest Rates Market Report – Economic Influences – September 15, 2009

MBS's Are Nervous About Inflation

Cash for Clunkers”

Retail Sales jumped 2.7% last month, primarily due to the $4,000 gift to consumers to purchase a new vehicle, as opposed to continuing to drive their gas guzzling hunk ‘o junks.  More help was given to Sales numbers when retailers discounted their “back-to-school” items.  This information was, obviously, pretty hot, keep in mind…we’d have to see a few months of reports like this.  Not just one, to really impact the economy, and let’s face it…the jobs numbers are more important than this information.

Producer Price Index

August also show us an “on fire” Producer Price Index.  This was primarily sparked by the biggest surge in gas prices in TEN YEARS!  We’re hoping to see this cool down a bit, and perhaps we’ll see more information in tomorrow’s Consumer Price Index.  The Producer Price Index shows inflation at the wholesale level, like manufacturing.  Something to consider, here, is that during the recession, many manufacturers were slow, because the consumer wasn’t buying.  So, stores left items on their shelves, for longer periods of time.  Now that those items need to be replaced, it looks like manufacturing is way up…but is the consumer really buying?  Tomorrow will help point us in the right direction.

Locking?

Over the short term, it would make sense to lock.  Our earlier talk of lower interest rates, due to third quarter earnings from corporations, has been somewhat swept under the rug by the Chinese Tariff on Tires.  There’s always something in the mix, that can shake up markets.  But if you’re happy in the low 5 percentage rates…I might take advantage of what’s available today.