February 1, 2010
February 1, 2010 by admin
February started on a much higher note than the month of January ended for the stock market, driving up fixed home loan rats along the way. The stock market jumped over 100 points on Monday as investors looked for bargain opportunities following a five percent decline in the DOW for the month of January. The markets were able to look past the fear and panic that appears to be setting back into the market as investors showed signs of concerns that the economy would be challenged for most of 2010.
Mortgage rates were pushed higher with the jump in equities today. The bond market crossed back over 3.6% , pushing up long term rates. Fixed thirty year mortgage rates are now closer to 5.25% and fifteen year rates are above the 4.5% range. Interest rates have benefitted from a decline in equities as bonds tend to be a safe haven for investors looking for stable investment options during uncertain times.
Politics continue to be a major focus for the economy to watch. The proposed budget from President Obama calls for a 3.8 Trillion dollar deficit. The proposed financial plan from the government calls for a deficit reduction beginning in 2011. It appears more and more likely that the government will need to set aside additional dollars for a job stimulus program and this is likely to further strain the economy.
Corporate earnings will be in the headlines until the market places a renewed focus on the labor markets starting with Wednesday when the ADP report for January is released followed by Friday’s non farm payroll report. The markets will be eagerly expecting an increase for the fist time in the last 18 months, but following the disappointing report from last month, it remains to be seen whether or not the labor markets have actually started to gain some jobs.
