With interest rates as crazy low as they are, Syd Leibovitch’s weekly breakdown is all the more interesting.  To satiate your financial market fix, check to see what he has to say….
Stock markets down for second straight week – Stocks began the week dropping sharply on fears of low oil prices’ effects on US oil companies’ job, profits and a drop in their stock prices. There was also speculation of interest rates hikes sooner rather than later by the Federal Reserve, as the 2014 economic data showed the economy had grown significantly. Stocks  rebounded Thursday when the fed made hawkish comments on the economy and reiterated that they were in no rush to begin to raise short term interest rates. While the Dow dropped over 300 points on Monday, by Thursday night it was back in positive territory for the week. On Friday a positive jobs report was released, but it showed that although job growth was strong in December, wages dropped slightly. After wages appeared to be on the rise the last few months this was not what investors were looking for and the markets dropped again The Dow Jones Industrial Average closed the week at 17,737.37 down from last Friday’s close of 17,832.99. The S&P 500 closed the week at 2,044.81 down from  2058.20 last Friday. The NASDAQ closed at 4,704.07 also down from 4726.81 last week.Treasury Bond yields drop significantly  – The 10 year Treasury bond closed the week at 1.98% down from 2.12%  last week. The 30 year treasury yield was 2.55% also down from last week’s close of 2.69%. If you keep an eye on the daily fluctuations in the treasury yields you will always know the trend for mortgage rates.

Mortgage Rates at 19 month low – The Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average for the week was down to 3.73% from last week’s 3.83%. This was the lowest the 30 year fixed has been since May of 2013.  The 15 year fixed was 3.05% which was down from 3.15% last week. The 5 year ARM was 2.98% The 1 year ARM was 2.39%. Jumbo rates are just slightly higher and under 4% for a 30 year fixed.

Unemployment rate ends year at 5.6%, down from 6.7% one year ago! – U.S. adds 252,000 Jobs in December. -2014 posts the highest number of new jobs since 1999 – The U.S. Labor Department released its December jobs report Friday. It showed that U. S. employers added 252,000 jobs in December. The private sector added 240,000 while federal, state and local governments added 12,000. For the year the U.S. added 2.95 million jobs which is the highest number of jobs added in a year since 1999. The unemployment rate was 5.6% which was down from 5.8% in November and down from 6.7% last December. On the negative side the average earnings dropped 5 cents an hour in December to $24.57 an hour. This was not expected as wages had finally begun to climb in the past few months. For the year wages were up just 1.7%. This is not good news. It will remain to be seen how many of these jobs were seasonal holiday hiring, and what happens with jobs and wages in coming months.

 With rates at such low levels it will be interesting to see how quickly the real estate market heats up. We always see a pick up after the holiday season. This year I’d expect it to be sooner and more pronounced due to much lower interest rates than one year ago. I would not be surprised to see a surge in prices beginning soon and lasting until May. I would expect them to begin to taper after that. Let’s see if I am right!

Have a great weekend!
Syd


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