Good Morning on this fabulous Friday,

Data today was no bueno. Durable goods dropped off a cliff, consumer sentiment heading that way too but only dropped about half as much as expected for the moment. Markets are all about flat on the day. Stocks, bonds, oil, gold, all within a range.

Dan Rawitch shared the following three sentences as succinctly as possible (I would have blathered on about it to get to the same point). Don’t be turned off by minutia.. Fibonacci sequences are just technical pivot points, the bigger picture is equities look ready to fade and test recent lows. When that happens, there is a good chance that mortgage interest rates will drop firmly into the 2’s.

The S&P has made repeated attempts to climb above the Fibonacci 50% retracement level and this is concerning for the stock bulls. At some point the market is likely to stop trying and possible run down and test the lows of last month. This in turn would traditionally be quite bullish for bonds but at the moment, the Fed owns the bond market and I expect things to stay range bound in a fairly narrow range.

Let’s move on to the unemployment situation. With yesterday’s claims of 4.4mm, it brings the 5week total to 26mm. More than the great depression and great recession combined. The more alarming point though is it puts the unofficial national unemployment figure somewhere between 17 percent and 20 percent. Anyone a bit nervous about that? How/when do those jobs get reabsorbed.. I love pictures so here are a few.

1. Unemployment per state.. Nevada sticks out like a sore thumb..
2. From the public/workforce perspective, when do you feel its ok to go back to work
3. This one is unbelievable, I don’t know how this is even possible but apparently in more than half the states in the US, you can make more from unemployment than you can from your job (if anyone has insight here other than it’s an average of both wages and benefits, please let me know)

I have to finish with some good news on how active the housing market is. Zillow shared that online searches have increased over the past month and have surpasses the same time last year. These will become buyers and sellers soon.  I am including a snap shot of just the Las Vegas results and here is a link to the article where you can search for any submarket. I do not expect any precipitous fall in home values. I do expect rates to drop into the 2’s over the next 6 months.