The Dow took a hit last week on a number of economic issues, one being that inflation fears are interrupting China’s economy. We live in a global economy and whatever happens over there, doesn’t always stay over there. Plus, the Fed’s action of buying more government debt of about $600 billion. The Fed chose to start the purchasing program to help increase loans and to help businesses create jobs. There are economists who do not agree with that decision. Fewer folks applied for unemployment aid last week, which is the third drop in four weeks and evidence that the job market is showing signs of life, this according to the Associated Press. Some big retailers have also announced additional temporary hiring for the holidays. Finally, the U.S. trade deficit narrowed in September, with U.S. exports at their highest level in the past two years. Everyone agrees that more must be done to lower our trade deficit.
Mortgage rates rose again last week. However, rates are still around 4.250% for the 30 year fixed rate index. I have seen an uptick in mortgage purchase applications too in-and around San Antonio and the Texas Hill Country. This usually happens as those who were waiting for even lower rates, realized that rates weren’t getting lower, they were actually going higher. There are also those who were waiting to refinance, thinking rates would push lower. It’s not too late for either. Most agree that mortgage rates will continue to remain low but, the questions is, “for how long?” Most likely rates will stay low through 2011 with the expectation they will rise slowly. Just a year ago they were at the 5.25% range and rates could reach those levels sooner than you think. Another question might be, “is 5.250% too high?” Not in my books, just ask your grand parents.
Economic data due this week: Monday: Retail Sales report= A measure of receipts from a sampling of retail businesses for durable and non-durable merchandise. Tuesday:PPI (Producer Price Index= A measure of price changes at the wholesale level. Wednesday: CPI (Consumer Price Index)= A measure of price changes at the retail level. Wednesday: Housing Starts= The number of residential units that construction has began. Thursday= Weekly Jobless claim. Thursday: Philly Fed Index= A regional manufacturing survey.
Quote of the week!
Obstacles are the things we see when we take our eyes off our goals.
Stupid joke of the week!
Why wasn’t the bear able to telephone
the King of the jungle?
Because the Lion was busy