April 1, 2009
April 1, 2009 by admin
The stock market is starting the month of April on an upswing and looks to follow up on the rally from the month of March. The market has greeted a number of key economic reports with a glass half full view today. Stocks finished the month of March up almost 15% as they have rallied off of the lows seen in early March. Today brought the first glimpse of what could be another dismal jobs report out on Friday. The ADP private sector employment report showed a contraction of over 750,000 jobs for the month of March. This is the worst month of job losses in the past ten years and could indicate that the non farms number on Friday could also be horrible.
The stock market is looking past the poor jobs number and gaining optimism from the existing home sales report (up 2%) and the ISM report for the month of February which still showed a downturn with manufacturing, but at a better pace than the month of March. The optimism in the market has many economists and investors gaining hope that the worst of the market may be in the rear view mirror and that the confidence levels and spending will soon begin to make slight increases. Corporate earnings have been heavily discounted in todays share prices for almost every component of the dow.
Low mortgage rates are likely to be one of the major factors with the uptick in housing numbers for the month of February. The yield on the ten year bond is now at 2.66% and thirty year fixed rate loans are again in the low five percent range. The drop with interest rates has also been a good move for lenders who have seen a surge with mortgage refinance applications. A rebound in housing and the recent run up in the stock market could help to boost confidence for consumers who have been beaten down over the past six months. A bottom in housing will be the first true sign that the economy will be heading back up into 2010.