Stock markets finished the week higher – Stock markets ended the week higher again as investors celebrated positive news and data. Higher than expected year end corporate profits were reported. There has been a drastic drop in COVID-19 cases nationwide. Vaccine distribution has increased, and it was announced that almost 50 million doses have been administered. The Biden Administration announced the purchase of an additional 200 million vaccine doses. Another $1-$1.9 trillion in stimulus appears to be all but certain to pass leaving investors bullish on the economic prospects for 2021. The Dow Jones Industrial Average closed the week at 31,458.40, up 1.0% from 31,148.24 last week. It is up 2.8% year-to-date. The S&P 500 closed the week at 3,934.83, up 1.2% from 3,886.83 last week. It is up 4.7% year-to-date. The NASDAQ closed the week at 14,095.47, up 1.7% from 13,856.30 last week. It is up 9.3% year-to-date.
U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 1.20%, unchanged from 1.19% last week. The 30-year treasury bond yield ended the week at 2.01%, up from 1.97% last week. We watch bond yields because mortgage rates often follow treasury bond yields.
Mortgage rates – The February 4, 2021, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate was 2.73%, unchanged from 2.73% last week. The 15-year fixed was 2.19% unchanged from 2.21% last week. The 5-year ARM was 2.79%, almost unchanged from 2.78% last week.
Pending home sales hit record level – The National Association of Realtors announced that pending existing-home sales which include new contracts signed for single family homes, condominiums, townhomes, and co-ops hit the highest number ever recorded in December. We watch pending home sales because that is an indicator of what closed sales will total 30-60 days later.
Home sales data for January will be released next week and included in next week’s update. Following the most homes ever sold in November, the most homes ever sold in December, we expect the highest number of homes ever sold in January. Stay tuned for the official numbers!
