Boy talk about a roller coaster as one day stocks are rallying and then the next they’re tanking. Same with rates as we’ll get improvement and then it gets worse along with the 10 year going up and down. If you had to name one thing that has triggered this roller coaster market? US-China trade “talks” as it’s been ongoing for awhile as one week it’ll be “imminent” and stocks then rally and rates go up and then the opposite.
Here’s a headline from an article “US -China Trade Talks Collapse”…………………do want to know the date of that article??? July 24, 2017 (yes that is 2017 or almost TWO YEARS ago!!!
Now really how much has this affected the markets is kind of difficult because the DOW is up about 15% from July 2017 but down about 5% from all-time high in October of 2018. So on one hand this trade “issue” has affected stocks on a day to day basis but not on a longer term because the market will focus on other things (jobs, economy, inflation, etc.).
So expect adjustable loans to be priced really well and don’t think that rates keep going down especially in this volatile market (DOW was down as much as 480 but finished around 280 and the 10 year was as low as 2.27% but finished at 2.33% but opened up at 2.39%!!
Inflation is low and the Feds keep saying this is “transitory” meaning they think it’s a temporary thing (inflation has been low for over a decade now) and just think about where the unemployment rate is and how many jobs being created albeit at ok growth and yet inflation has fallen?? With the job market this tight then usually inflation jacks up (tight labor market generally means wage inflation which then spurs higher retail prices, services, etc.) yet it’s not??? What people don’t realize is that we “import” a lot of products where prices are cheaper which of course keeps our prices lower.
This is also a reason why many of our industries have their products made and produced in other countries because labor and the cost of goods are lower than here.
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Mitch Lichterman
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