First, let me offer prayers to all the families impacted by Hurricane Ian. Both mother nature and the market have been challenging this week. The big market news from this week came from the overseas Bank of England(BOE), which announced a two-week purchase program to help settle their markets after major selloff of UK Government bonds. This is all on the heels of the actions implemented by newly elected Prime Minister Liz Truss who took a page out of the Reaganomics textbook and proposed significant tax cuts in hopes of stimulating business activities. The ripple effects of these proposed changes sent bond prices higher while putting additional downward pressure on the British Pound. The action by the BOE gave our markets a momentary bump as it was perceived as a place of safety in the near-term as things settle down. Although that bump was short lived as the market continued to sell off later in the week.
Mortgage demand and refinancing have now dropped to a 22-year low as interest rates continue to move higher. The average fixed 30-year loan increased to 6.5% from 6.25% over the past week on loans under $647k. There has also been an uptick in the use of “Arms” or interest only loans as consumers look at near-term strategies in financing new purchases.
As mentioned in recent articles, we continue to see an uptick in consumer product manufacturing where there had been prior shortages. Although the effort may be a little too late as companies warn that demand is finally beginning to soften. Naturally this is a positive sign for the fight against inflation as excess inventory and softening demand will drive prices lower. We saw this on Thursday in a report from Nike after they announced that this had occurred in numerous stores around the world. This is something that we anticipate will continue to happen across the retail market. Hopefully this will help move inflation lower to the Fed’s targeted range and help ease the market jitters.
Did someone say free coffee and donuts!?! Just another reminder to join us at our Annual Shred It event next week. The event is held on the back lower lot of our building on Saturday 10/8 from 9am to 12pm. Hope to see you there!
Steven C. Dengler, CFP®
Financial Advisor / Director of Planning
Mosaic Asset Partners, LLC
1122 Kenilworth Drive, Suite 310
Towson, MD 21204
410.821.0089 fax 410.821.5993
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Mosaic Asset Partners, LLC is not affiliated with Kestra IS or Kestra AS. Disclosures. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra IS or Kestra AS. The material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by Kestra IS or Kestra AS for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.