Danny Salas

Chico, CA Interest Rates Market Report – Economic Influences – September 21, 2009

A Lot Happening This Week

War…What Is It Good For…

Absolutely Nothing…Yeah, I’ll say it again; Absolutely Nothing!  Uh, except lower interest rates.  Israel and Iran and feuding, and if war breaks out between the two countries, investors will move their money from stocks, to a safe-haven, like bonds.  But, I’d rather see peace, than lower interest rates.  Just so ya know…

3rd Quarter Ending

So, the 3rd Quarter is ending next week.  This is the opportunity that I have been talking about for quite some time.  I don’t think Stocks will look too Rosy.  Also, it’s a time when portfolio managers will sell off their poor Stocks to buy trendy, hot good stocks.  This is known as “window dressing.”  Again, that should be good for interest rates. 

Treasury Auction

Wow!  $112 Billion Treasury Auctions starting Tuesday.  2, 5, & 7-Year notes will be auctioned.  We’ve seen a healthy appetite for these recently, however, when will the well dry up?  It will be interesting to see if foreign appetite is still apparent.  If it is, coupled with the above information on Stocks, rates should really look good.  If not…the opposite could happen.

Fed Meeting

Good ‘Ole Ben Bernanke and his chronies are meeting this week.  Expect Wednesday’s comments to the public to have some weight on it, and that could move markets too. 

Floating

We’ll continue to float today.  This week could be a huge opportunity for interest rates…keep checkin’ in!

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.