Santa Clarita Real Estate & Market Report: February 06, 2015: What is fueling the stock market this week that has it rallying 710 points over the last 4 days?

Oil prices and quarterly earnings are big drivers for the week.  Oil prices have rebounded this week from the free fall we have been seeing in recent times.

Rapidly falling oil prices, as much as consumers love it at the pumps, is not necessarily a good thing.  Instability or what seems like out of control movements in the market or economy are never good long term for investors.

Initially, people may cheer rapid increases or declines in the market as a lot of money can be made when this occurs. However, the longer the instability persists, the more uncertainty creeps into the minds of investors and consumer which can then lead to fear and irrational investment decisions and behavior.

Better than expected earnings reports for the week have also played a role in the market rise. The sentiment that is growing with investors is that the economy will continue to improve and that stocks are the right place to be parking their money.

What is bizarre is that just last week the stock market was moving in the opposite direction because of economic fear.

Mortgage rates which has been dropping to lows we have not seen since 2013, have risen slightly. Surprising though is that the low mortgage rates have not yet been translating into a significant increase in purchase activity.

Purchase activity is certainly being tempered in the Northeast.  It seems as though winter has finally decided to show up in that area.  Two major snow storms within just over a week have homeowners and purchasers moving into hibernation similar to what occurred last year.

The latest forecast is for another twelve or more inches of snow to hit the area on Monday.

Santa Clarita Real Estate & Market Report

Employment may be cooling off somewhat.  Wednesdays ADP Employment Report is showing signs of slower growth for January. ADP reported that private payrolls increased only 213,000 which is lower than December’s upward revised 253,000.

February’s employment numbers may indicate improvement as weekly first time jobless claims remain below 300,000. Claims below this threshold is considered healthy for the labor markets.

Cybersecurity companies will continue to grow as more and more fear about data breaches occurs. The latest breach, and what might be the largest one ever, occurred against Anthem Health. The damage is still being assessed however Anthem has confirmed that the hackers have broken into a database that contains names, addresses, birthdates, and social security numbers.

They have not yet determined how many records have been stolen however their early estimates are tens of millions.

Next week’s potential market moving reports:

Wednesday February 11th – MBA Applications

Thursday February 12th – First Time Jobless Claims & Retail Sales

Friday February 13th – Consumer Sentiment

As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends.

I welcome the opportunity to serve you in any way I possibly can.  Please feel free to reach me at 661-505-4300.