Tuesday, April 26, 2016

Chicago's Mortgage Choice - April 26, 2016 Real Estate Report - And They Are Off...

Yes, today we are talking about politicians. And we don't mean "off their rocker" -- just in case you are wondering. What we mean is that they are off and running in a Presidential race. The primaries are in the home stretch and there certainly has been a lot of noise. But as the candidates are finalized, the noise will get even louder. Or, should we say, the rhetoric. Why is the Presidential race important for the markets? The markets obsess over everything. And if a Presidential candidate says something that upsets or is joyful to the markets, the markets will react as if they are already President, even though they are not. Basically, this will be just one more variable factor the markets will have to contend with for most of the year. Along with jobs (next week), the Federal Reserve Board's interest rate decision (this week), oil prices, China and about one hundred other factors. Speaking of the Federal Reserve Board, they announce their decision tomorrow. Most are expecting the Fed not to raise rates at this meeting. Even though the jobs machine has been humming, inflation is nowhere to be seen and most economic reports here and overseas have been less than overwhelming. If they don't raise rates, speculation will be humming when we get to their next meeting, which is in the middle of June. Just in time for the Presidential conventions! Keith Stewart 773-529-7000

Tuesday, April 12, 2016

April 12, 2016 Real Estate Report - Best of All Worlds Revisited

The first quarter of 2016 is in the books. It was a pretty wild quarter to say the least. We started the quarter with the news that the Federal Reserve had started raising interest rates and plenty of international turmoil. The stock market underwent a healthy correction and based upon the preliminary data for the fourth quarter's economic growth, the economy ended 2015 limping. Many were pessimistic regarding the outlook for 2016 and it seems with good reason. Then the unforeseen happened. The economy created over 600,000 jobs in the first quarter, interest rates moved lower and the stock market recovered all of it's losses to move into "break-even" territory for the year. The fourth quarter's economic growth also turned out to be higher than previously reported with subsequent revisions and even oil prices, which also plunged in the first quarter, recovered somewhat. So where does that leave us for 2016? Are we going to continue to produce jobs, enjoy low interest rates and see the stock market continue to go up from here? That would indeed be the best of all worlds, but unfortunately we can't guarantee this scenario. It would be nice. One factor we should be watching is corporate profits, which are starting to be released for the first quarter. If corporate profits don't start growing again, it is unlikely stocks will continue to prosper. When they meet at the end of the month, the Fed's assessment will be interesting to see. Keith Stewart 773-529-7000