October 29, 2024
If there is one feature of the markets you can always count on, it is the attribute of non-lineal progression. What does that mean? In plain English, it means that the markets do not rise or fall in a straight line or in accordance with a certain set path. For example, when mortgage rates rose from a low of 3.00% three years ago to a high of 7.75% one year ago, there were four time periods in which rates actually fell, even though they were on the way up.
Similarly, now that mortgage rates are falling, they are not falling in a straight line. Rates fell from 7.75% to just over 6.00% over the past year, but they rose significantly this spring and also have risen since hitting their low in mid-September. This does not mean that rates have stopped falling or that the trend has reversed. It is really a normal occurrence which might be caused by typical market variations or intervening variables such as the strong jobs report released earlier in October. Of course, there can always be intervening variables that are even stronger such as world-wide tensions. Certainly, there have been plenty of those this year.
Speaking of variables, the next two weeks are likely to have plenty of those. First, we will have the third quarter economic growth advanced estimate (GDP) released this Wednesday. Thursday we will see data on personal income and spending, along with the Fed’s favorite inflation indicator. The week will end with the October jobs report. Of course, the election is Tuesday of next week, followed by a meeting of the Federal Reserve which starts the very next day. All we can say is that you should hold on, because the next week or two could be a very wild ride!
Source: Origination Pro
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Philip Loria, President
Benny Loria, Vice President
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