02 Apr Stocks Make Strong Move Higher
Stock prices climbed above the strong ceiling of resistance yesterday, taking another step towards setting new all-time high records. It’s too early to say for sure if stocks will be able to hold on to their gains or if they will be pushed back below before the old ceiling becomes a strong floor. With this week being “jobs week,” much of the outcome could be decided by the number of new hires in the month of March. Given that last month was a dismal 20,000, this could be a “catch-up” month where we see a very strong number. That would likely trigger a rally in the stock market that would create an additional headwind for mortgage interest rates.
CoreLogic reported another strong month of home price gain, with February’s numbers coming in at a 0.7% gain. Although this sounds incredible, the year-over-year gain was only 4%, which is well below the trend of recent years. Don’t get me wrong, a 4% gain is still amazing. It does show, however, that the market is slowing. With the spring and summer buying season just around the corner, I expect that we will see a hot housing market, at least for the near term. As we approach 2020, we will likely face additional recession headwinds.
With stocks still posing a threat to the bond market, we will maintain a locking bias.