Today’s market update!

The stock market continues to soar to the stars. Another week, and more record highs. The driving force behind the Dow’s rocket ship climb is the expectation of tremendous growth in corporate earnings. The economy as a whole is doing extremely well. We are essentially at full employment in the United States. There are numerous strong economic data reports that have been coming out. Inflation remains low while interest rates are also low. Major corporations are showing strong profits.

In addition to this, the corporate taxes are dropping from 39% to 21%. This sets the stage for huge corporate profits and business growth. As much as there has been much criticism regarding the change in tax policy, more and more companies are announcing that they are giving some of the tax reduction windfall back to their employees. Albeit in most cases, what is being paid out to employees is not significant in comparison to the savings the companies will receive, it is still more money going to consumers that will bolster the economy further.

Job Openings and Labor Turnover Report:

Despite the fact that the number of job openings has declined slightly from the highs of July, there is still clearly a labor shortage. New hiring continues to remain strong at or near the all-time high that was set in October at 5.592 million.

Workers and employers however are remaining risk adverse. The number of people leaving their current jobs declined by 0.9 percent in November. Even though there are plenty of job openings, it appears that workers seem to be more comfortable and secure remaining where they are versus seeking higher pay.

Mortgage Application Activity:

Despite mortgage rates rising in the first week of the year, home loan activity for both purchases and refinances continues to point to a strong housing market. For the week ending January 5th, applications for refinancing unexpectedly jumped by 11.00 percent. For the same period mortgage apps for purchasing increased by 5.0 percent. Refinance applications still represent approximately 52 percent of mortgage loan activity.

 Next week’s potential market moving reports are:

 

  • Monday January 15th – Martin Luther King Jr. Day
  • Tuesday January 16th – Empire State Manufacturing Survey
  • Wednesday January 17th – MBA Mortgage Applications, Housing Market Index
  • Thursday January 18th – First Time Jobless Claims, Housing Starts
  • Friday January 19th – Consumer Sentiment

As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at 661-618-1789.