Good Afternoon! I hope you all had a fabulous 4th of July holiday weekend. We are now into the part of the year where we won't see another holiday until Labor Day, so the short work weeks have ended for the summer again.
On a happier note, it has cooled off today, for those of us who dread those 90+ degree days.
The stock markets took a major hammering on Friday with the higher than expected unemployment numbers. In addition, China was again talking about a "universal reserve currency, rather than the U.S. dollar, so the markets jumped into sell mode for fear that China would start dumping the $1.9 trillion dollars they are currently holding. Today, Russia indicated that a universal reserve currency should be something to be discussed, but for now the US dollar is still that currency and trading up today. So far, the 2nd quarter has not been kind to the rest of the markets.
The stock market opened down all the way around this morning, but is now trading up around 40 points for the DOW, and down approximately 10 points for the NASDAQ. Remember that 2nd quarter business earnings reports begin soon, so the market is skittish ahead of those earnings, though most analysts don't expect much. Also, potential market and rate movers are the big treasury auctions again this week.
Gas and oil prices are way down to levels we haven't seen in almost 6 weeks. Oil is down to around $64/barrel. Hopefully we'll see gas prices at the pumps follow shortly. In fact almost all commodities are trading way down today. Metals of all types, both precious, like gold and silver, and unprecious, like aluminum and steel, are way off recent high prices. Even fertilizers and seed are way down. Does this mean food prices might drop?
Australian wine makers are complaining that wine is getting cheaper than bottled water. Wine in Australia is currently selling for less than half the price it was 10years ago. And in Cape Cod, the price of lobster is about equal to the price of lunch meat? Really? So, this recession means that we can all eat and drink like kings, as long as we eat at home? Works for me. Personally I've been enjoying some of the more costly types of fish, as fishermen are also being hit hard by this recession.
The U.S. service industries (home builders, retailers) contracted at a slower pace last quarter than prior quarters which most commentators are jumping on as an indication that we are starting to see the economy turning slightly. Most businesses however, are saying that when they see housing stabilize, then they will start increasing their output. Again, it's that Catch 22 (Housing won't stabilize until employment stabilizes. Employment won't stabilize until businesses increase output, and round and round we go.) Which came first, the chicken or the egg? Hmmm.
In the meantime, monetary policy makers are again urging and criticizing banks for sitting on all the funding they have been receiving from central banks, rather than lending out those funds to stimulate businesses and world economies.
Lastly, another bright note is that mortgage rates are down a bit today. We are definitely nearing that **5% mark for the 30 year fixed rate loan. The 5/1 ARM is dropping more dramatically and more quickly than the 30 year fixed and is solidly below that 5% mark today with almost all the lenders that are offering the product.**
From what we're hearing, there is no cause to rush to top off your gas tanks today. Oil prices have broken through a resistance level, and are expected to continue to drop to closer to $60/barrel for the rest of this month.
Low rates!! Low gas prices!! It's sounding better to me!
Enjoy the rest of your day today.
Best regards,
Shelby Bateson
Town & Country Mortgage
10228 SW Capitol Highway
Portland, OR97219
503-819-6545 phone
Lic # ML-3604
http://www.shelbytncmortgage.com
** Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.
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