Danny Salas

Archive for October 6th, 2009

Chico, CA Interest Rates Market Report – Economic Influences – October 6, 2009

Rates Will Move Up On Australia's Rate Increase

Put Another Quarter Percent On The Overnight, Mate

That’s right…Australia’s Reserve Bank increased their overnight rate to 3.25% from 3.0%.  It was totally unexpected!  They indicated that they felt as though it was not only safe to do so, but that other hikes could be around the corner.  This signaled stock market frenzy throughout the world, as the markets are taking this as a hint, that globally, things are looking better.

There’s Gold In Them Thar Hills

And it reached its highest value ever!  $1,040 an ounce.  The Australian announcement is also pushing up oil costs, putting pressure on the U.S. dollar, and increasing metal costs all over the world.  This is concerning, as if other countries are more prepared for an economic recovery, before the United States, it could prove more difficult for the U.S. to get out of our financial woes.  With our unemployment rate near 10%, it’s difficult to see the Fed making a move to increase the overnight rate, any time soon.

Drum Roll Please

Stocks 3rd Quarter Earnings will start to pour out their financial status, starting tomorrow.  This is huge news, particularly due to the fact that things have been looking so rosy for the last few months.  I think that the information won’t be as bright a picture as the media has been portraying, as of late.  It’s one of the main reasons why I called rates to be in the fours, almost two months ago.

Why Not Lock?

With rates this good, an so much uncertainty in the market.  I’d take my chances and lock.  Today may see some volatility, then after the 3rd Quarter Earnings Reports start to hit the market, we may see some lowering back to where we were yesterday.

Related Must Reads

Read, “Unchartered Territory in this ‘08 Article
What Will Cause Rates To Be In The Fours?
Recession Around The Corner? From August of 2007

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