Morning Report: Fed intervention

Vital Statistics:

 

Last Change
S&P futures 2581 129.25
Oil (WTI) 33.12 1.89
10 year government bond yield 0.95%
30 year fixed rate mortgage 3.6%

 

Stocks are up big this morning, while bonds are down. Why? Just because. No reason.

 

The Fed intervened in the markets and injected liquidity into the short term money markets. Stocks initially jumped on the news but sold off as it had nothing to do with stocks. Remember, the Fed was having end-of-quarter issues in the money market in September, long before Coronavirus was even a thing. The Fed may bring back QE if things don’t settle down, but don’t bet on it making too big of a difference in mortgage rates. It didn’t do all that much the last time around, and we weren’t at the zero bound in long term rates like we are now.

 

Coronavirus fears are looming over the Spring Selling Season, according to NAR. The NAR said it expects to see a 10% drop in sales this month. The timing couldn’t have been worse, as 40% of sales take place between March and June. That said, if people have to move, they have to move. I could see lower activity affecting investment purchases as professionals wait to see if there is a major economic impact.

 

Realtor.com is coming up with its own estimate of home values to compete with Zillow’s zestimate. The Realtor.com estimate will supposedly utilize different logic.

Author: Brent Nyitray

Why do you need new bands? Everyone knows rock attained perfection in 1974. It's a scientific fact. - Homer Simpson

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