Good Afternoon All-
Happy Halloween!
We have seen a crazy few days. We have had one name that has been resonating in our ears.....SANDY. Hurricane Sandy has devastated many areas of the east coasts. For the first time since 1888 our stock market was closed for 2 consecutive days. The damage that Sandy has caused is estimated at over 20 billion and growing. Today the markets are open but they are running on a "skeleton crew" which means the volume is very light w. Volatility will be rampant.
So how does this affect our mortgage world?
Understand that these catastrophic events, although they result in carnage and death, they pose to be very good for interest rates. Investors tend to move away from stocks and push money into bonds thus lowering rates. Remember what happened March 11th, 2011 when the Tsunami hit Japan? We saw a decrease in our rates of about .250% in a week. This disaster might very well have that effect as the days and weeks go on. Insurance funds will have to unload there equity positions to raise cash to pay for all of this damage. We should see stocks moving lower and bond prices pushing higher.
Due to the markets being closed all of our economic data has been delayed. So we have an interesting few days ahead.
We have consumer confidence reports, income reports, manufacturing surveys, etc . Then on Friday (the first friday of every month) we have the Non-Farm Payrolls and the Unemployment Rate. So tomorrow and Friday will be very choppy. None of these recent events will be taken into account for Friday's numbers. Based on the mediocre earnings we have been seeing the numbers shouldn't be anything to write home about but you never know.
Nov 6th will be a huge day (election day) and expect some major movement on Nov 7th following the results.
Remember volatility is the new normal in our lives. Expect nothing less.
Be aware of your market, educate your clients and let's close some deals.
Josh
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