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2019 stock markets rise for third straight week

After the worst December since the depression, stocks have had three weeks of solid gains. Investors have more optimistic views on interest rates following comments from Federal Reserve Chairman Jerome Powell. The Fed Chairman said that rate hikes will moderate in 2019. His comments were also reflected in the Fed Minutes, which were released last week. 

Mortgage and bond rates have dropped as well, lowering borrowing costs for consumers. Plus, talks with China have encouraged investors, as they feel a trade deal is forthcoming. Investors also feel stocks were oversold in December’s panic.

The S&P is now up over 10% from its low point in December. The Dow Jones Industrial Average closed the week at 23,995.95, up 2.4% from 23,433.16 last week.  The S&P 500 closed the week at 2,596.26 up 2.5% from 2,531.94 last week. The NASDAQ closed the week at 6,971.48, up 3.5% from 6,738.96 last week.

Treasury Bond Yields up slightly this week – The 10-year treasury bond closed the week yielding 2.71%, up from 2.67% last week. The 30-year treasury bond yield ended the week at 3.04%, up from 2.98% last week. We watch treasury bond yields because mortgage rates follow bond yields. 

Mortgage rates drop further to the lowest levels in 9 months  – The January 10, 2019, Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.45%, down from 4.51% last week. The 15-year fixed was 3.89%, down from 3.99%  last week. The 5-year ARM was 3.83%, down from 3.98% last week. 

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