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Market Snapshot October 11, 2021

Good Monday AM,

The bond market is closed today for the holiday. The equity markets, though, are rolling along with most in the green. In truth, I am thankful for Columbus Day and the bond market taking a breather. Maybe tomorrow we will see some common sense back in the trading pits. Friday’s sell off was both unexpected and unreasonable. Yes, the unemployment rate fell to 4.8% in September from 5.2% in August but only added 194,000 jobs, the smallest gain since December 2020. Many workers, especially women, exited the labor force last month, leading to a smaller pool of labor and driving the unemployment rate lower. Some women who did return haven’t been able to stay in the job as the Covid-19 Delta variant raised fears and scrambled child-care plans. In September, women lost 26,000 payroll jobs. Regardless of the selloff in bonds, the economic facts are that the US is economy is not rebounding as hoped and more to the point, we are seeing downgrades to future growth. Why then are bonds the red headed stepchild? Well, the shorts are selling… they will have to cover at some point soon when we find a bottom (or at least that is the hope), but the 10-yr. at 1.61 brings in the possibility of more selling to 1.75% if we do not see some turnaround soon. We will know more in the next few days.

Here are a few tidbits from around the housing sector…

Buyers are frequently paying above asking price to win bidding wars, and appraisals haven’t always kept up with those rapid price increases. About 13% of appraisals came in below the contract price in August, according to housing-data provider CoreLogic. That was down from a recent high of 19.7% in May but above 7.3% in January 2020, a rate CoreLogic said is more typical for the housing market.

Since 2014, when millennials became the largest share of home buyers in the U.S., the number of home and condo sales across the country by co-buyers has soared. The number of co-buyers with different last names increased by 771% between 2014 and 2021, according to data from real-estate analytics firm Attom Data Solution

And one last interesting piece. In a study of VantageScore 4.0 changes for consumer credit lines other than student loans, TransUnion found that 58% of those with an indicator of forbearance or any other type of payment relief program in 2020 saw an increase during that year, when the CARES Act limited some adverse credit actions. Amazing how not paying your bills makes you more credit worthy… lets not get started on this conversation.

Please remain safe and healthy, make today great!