April 14, 2009
April 14, 2009 by admin
The stock market headed for a lower open on Tuesday as the market began to digest a worse than expected report on retail sales. The stock market has managed to rally back above the 8000 point level and now is trying hard to hold these levels. Investors will begin to digest economic reports and corporate earnings in their analysis of whether to stay in equity positions. Today, the retail sales report for the month of March was down 1.1%, well below most analysts expectations. This report, is a clear indication that consumers are lacking confidence with the immediate direction of the economy and the continued job losses previously reported over the last year will have a lingering effect on the market.
The second major report released today was the PPI report for the month of March. The producer price index report indicated that wholesale level inflation was mild, thanks in large part to a decline with energy prices. The lower energy prices and the reduction in corporate spending have created a large decline in the market for price inflation, their is a large concern that inflationary prices could spike over the next two years with the large influx of government stimulus coming in the market.
The real estate market will continue to benefit from the fall back in equities, mortgage bonds have traded flat over the last week. Fixed rate mortgage loans are still hovering in the low five percent range with most national banks for a thirty year loan term with zero points. Consumers who are shopping for a fifteen year fixed loan or are considering paying points to buy down their interest rate, can take advantage of interest rates in the four percent range. The historically low interest rates have moved up slightly over the past month as investors are beginning to put more money back into the stock market, but remain very attractive in the near term.