Last week’s newsletter was all about the Fed Minutes, which showcased a fairly detailed strategy for reducing the size of the Fed’s balance sheet. It was generally more rate-friendly than investors expected. This week’s jobs report added fuel to the fire.
Source: Kevin Litwicki Universal Lending
Jobs Report Adds Fuel to Fed's Fire

Although markets entered the week on the lookout for more political headlines, it was the Fed that ended up taking center stage. The Minutes from the early May Fed meeting contained important details on the Fed’s plan to slowly decrease the amount of bonds on its balance sheet. This ended up being good news for both stocks and bonds. Here’s why…
Source: Kevin Litwicki Universal Lending
Markets Cheer Fed's Reinvestment Plans

Last week, mortgage rates were just beginning to break the upward trend that’s been in place since mid-April. Without much on the event calendar, it was unclear what this week would do to confirm the breakout. Unexpected political headlines quickly became the focal point, sending shockwaves through the entire financial market and confirming the rate breakout.
Source: Kevin Litwicki Universal Lending
Political Headlines Send Rates to 2017 Lows

When it comes to interest rates, there are only a few quintessential sources of inspiration: the economy and the Fed. After entertaining a complex cadre of new suitors in recent months, rates finally seem ready to reconnect with those familiar old flames. This week, that turned out to be a good thing.
Source: Kevin Litwicki Universal Lending
Rates Quickly Reconnecting With Old Flames

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