Multiple sources of inspiration continued vying for the market’s attention this week with no clear winners. Stocks remained fully locked in the same indecisive pattern that emerged last week. Rates, on the other hand, may be starting to choose a side.
Source: Kevin Litwicki Universal Lending
Markets Still Juggling Multiple Sources of Inspiration

Heading into last weekend, financial markets were eagerly waiting for the results of the French election as well as more info on the Trump administration’s tax reform plan. While the market reaction wasn’t much of a surprise, it leaves us in an uncertain position heading into next week’s Fed announcement.
Source: Kevin Litwicki Universal Lending
Politics and Policy Put Markets Back on The Fence

In last week’s newsletter, we discussed a series of wild cards hitting the table and the resulting impact on financial markets. Specifically, the potential reversal of post-election optimism helped interest rates break below 2017’s narrow range. But that was just one small example of much bigger uncertainty. Sooner or later, markets will have to decide what’s most important and trade accordingly.
Source: Kevin Litwicki Universal Lending
For Markets, Political Spotlight Shifts From US to Europe

After spending nearly 6 months in the same narrow range, interest rates finally made a move LOWER this week, much to the chagrin of the prevailing narrative calling for “higher rates in 2017.” At the same time, stock prices have been in their most persistent downtrend since the election. All this has investors wondering if the “Trump trade” is beginning to unravel.
Source: Kevin Litwicki Universal Lending
Rates Hit 2017 Lows as Wild Cards Hit The Table

Even before it began, this week was destined to be interesting, if not downright important, due to the data and events on the calendar. The scheduled events were joined by unexpected headlines, making for even more market volatility. By Friday, just when the stars seemed to align for rates to break below 2017’s constrictive range, they shot paradoxically higher! Why would they do such a thing?
Source: Kevin Litwicki Universal Lending
Making Sense of This Week's Crazy Market Movement

Over the past few weeks, downbeat, cautionary housing market data has been increasingly prevalent. During that time, rates and stock prices had generally moved lower. But those trends shifted this week–in some cases, abruptly.
Source: Kevin Litwicki Universal Lending
Opposing Arguments in Housing Data and Markets

Seemingly overnight, the bill to replace the Affordable Care Act is all anyone can talk about in financial markets. How did we get here and what does it mean for rates going forward?
Source: Kevin Litwicki Universal Lending
How The Healthcare Bill Affects Rates and Markets

Last week’s newsletter made the case that this week’s Fed rate hike was “pointless” because bond markets (and mortgage rates) had already fully adjusted for it. Instead, it would be the Fed’s economic projections (their forecasts for future rate hikes) that would make or break this week’s rate movement. That’s exactly what happened.
Source: Kevin Litwicki Universal Lending
Fed Hikes, But Mortgage Rates Fall. Here's Why

Next week’s Fed announcement is a hot topic. Market metrics and surveys of economists suggest ever-increasing odds of a rate hike. As such, it may come as a surprise to learn that a rate hike is pointless in terms of its impact on financial markets, but there’s a catch.
Source: Kevin Litwicki Universal Lending
Fed Rate Hike Next Week is Pointless!

Both for the housing market and interest rates, this week stood in stark contrast to the previous week. Whereas rates had been at the lower edge of their recent range, they’re now near the top. Whereas last week’s housing reports showed great promise, this week’s may raise serious doubts.
Source: Kevin Litwicki Universal Lending
Housing Implications of Fed's March Rate Hike