Danny Salas

Chico, CA Interest Rates Market Report – Economic Influences – January 29, 2010

Stocks Rallying On Hot GDP

Hot GDP Numbers

America’s Gross Domestic Product numbers rolled in at a hot 5.7%, when only a reading of 4.7% was expected.  This is the best reading since the third quarter of 2003.  This is the Advanced Fourth Quarter GDP figure.  We still have the Preliminary Reading, and then the Final Reading.  Often, these numbers get substantially revised, so we’ll have to wait and see what the true figures are, after some time.  An interesting component of this reading was that Consumer Spending, the largest component of the GDP, came in quite low.  This could have something to do with the end of the “Cash for Clunkers” Program that was abandoned the previous month.

So…Why The Hot GDP Numbers?

So, remember when I was talking about inventory levels at corporations?  The media was all giddy about Manufacturing numbers being so high…well…those manufacturing numbers are what has caused the GDP to elevate, this past quarter.  So, even though nobody’s buying, the media is going nuts over the GDP numbers.  But, they’ll get revised…believe me.  Sorry to sound so pesimistic, I’m just tellin’ it like I see it!

Fed’s Dissenting Vote

Fed comments from Vice Chairman Donald Kohn have bonds watching markets closely.  He simply stated that he sees rates moving higher, and that it could be swift.  Also, there was one Kansas City Fed President that was a dissenting vote regarding keeping “rates low for an extended period of time.”  It’s the first dissenting vote in over a year.  So, with these comments from the Vice Chair and the dissenting vote, are we, perhaps, looking for a rate-hike sometime this year?

Locking Advice

We’re still above the 200-Day Moving Average, so cautiously float into the day.

What To Subscribe To:

Get Our Twitter Updates
Get Our Blog Blast
Connect With Us On Facebook

This entry was posted on Friday, January 29th, 2010 at 8:19 am and is filed under Chico Home Loans, Home Buying, Interest Rates, 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.

Leave a Reply