FOR THE WEEK OF JANUARY 25, 2021 

 QUOTE OF THE WEEK

“Believe and act as if it were impossible to fail.”—Charles F. Kettering, American inventor"

NATIONAL MARKET UPDATE

Existing Home Sales rose to a 6.760 million annual rate in December. Sales in 2020 were the strongest since 2006, up 6.5% from 2019. High demand took 70% of sold homes off the market in less a month.Inventories are shrinking, so it was heartening to see Housing Starts rocket up in December to a 1.669 million annual rate. Home building hit its fastest pace since 2006, and single-family starts are now up 29.4% from their February high.Plus, more homes will come. Building Permits were issued in December at a 1.709 million yearly rate, also the highest level since 2006. NAHB homebuilder sentiment, though slipping a bit in January, still came in at a very high 83 read.

 REVIEW OF LAST WEEK

POSITIVE VIEW PREVAILS… Investors weighed positive news against near-term challenges and the upbeat view won out, sending the three major stock indexes higher, the tech-y Nasdaq reaching another record. Immediate concerns centered on disappointing news about coronavirus cases and the vaccine rollout, and on how much of the administration’s $1.9 billion stimulus proposal would survive Congressional wrangling.Still, housing remains resilient, with strong demand, though sales will ultimately ease due to lack of supply. Weekly initial and continuing jobless claims fell, while the financials sector reported better-than-expected earnings.The week ended with the Dow UP 0.6%, to 30,997; the S&P 500 UP 1.9%, to 3,841; and the Nasdaq UP 4.2% to 13,543.It was a quiet week for bonds, Treasuries modestly higher, and the UMBS 3.0% off just 0.6, at $105.03. In Freddie Mac’s latest Primary Mortgage Market Survey, the national average 30-year fixed mortgage rate ticked down slightly, near record lows. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.DID YOU KNOW?… The ginkgo biloba, commonly called the ginkgo or maidenhair tree, is the oldest surviving tree. Scientists have found leaf fossils for the ginkgo dating from 270 million years ago!

 THIS WEEK'S FORECAST

NEW HOME SALES UP, PENDING HOME SALES OFF, ECONOMY OK… The 2020 spike in home building should show up in higher New Homes Sales for December. However, declining inventories are expected to depress Pending Home Sales contracts on existing homes. We’ll get reports on GDP, Consumer Confidence, PCE inflation, Personal Income and Spending, and a Fed meet, but analysts forecast no surprises.NOTE: Weaker economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and higher loan rates.

 FEDERAL RESERVE WATCH

Forecasting Federal Reserve policy changes in coming months. We may find out more about how long we’ll enjoy rock bottom rates in the policy statement following this week’s Fed meeting. Wall Street still sees no moves for a while. Note: In the lower chart, a 0% probability of change is a 100% certainty the rate will stay the same.Current Fed Funds Rate: 0%-0.25%AFTER FOMC MEETING ON:CONSENSUSJan 27 0.00%-0.25%
Mar 17 0.00%-0.25%Apr 280.00%-0.25%
Probability of change from current policy:AFTER FOMC MEETING ON:CONSENSUSJan 27 0%Mar 17 0%Apr 28 0%

 BUSINESS TIP OF THE WEEK

If you want to know your most effective business activities, look at your sales for the last three months. How did you find those prospects, and what did you say and do to land their business? Those are the activities to focus on.