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THE NORTHWEST ECONOMIC MAINLINE 03·30·2009
What to Watch This Week
- With home builders reaping the benefits of the recent surge in the stock market, Lennar Corp.'s earnings announcement come Tuesday will surely be one to follow. Expectation for Q1 earnings remains low at -0.64 EPS (earnings per share), so this one definitely has the ability to cause a reaction from investors.
- As I have been stating for a few weeks now, continue to keep an eye on oil come Wednesday. Reports stating that gas prices have inched up, futures values have increased even with adequate reserves, and analysts predicting a major price spike began to surface this week. Heading into the seasons of warmer weather, this will be an interesting chain of events to watch.
- Wednesday will be an important news day. Given the impact of existing and new home sales figures released last week, I plan to pay close attention to construction spending as well as pending homes sales figures.
- On Thursday, President Obama visits London to hold talks with the leaders of China, Russia, India and the Republic of Korea that should offer some interesting insights. Additionally, the President will be attending the G20 Summit where he hopes to push further action and reform to strengthen the world economy.
What I Saw Last Week
- "30-year fixed mortgage rate" was the phrase of the week. On Thursday, Freddie Mac reported that rates on 30-year fixed-rate mortgages had dropped to 4.85 percent, the lowest rate ever recorded by their survey, which dates back to 1971. This is certain to at least pique the interest of homeowners and potential buyers.
- It comes as no surprise that mortgage applications also surged last week. The Mortgage Bankers Association reported that its seasonally adjusted index of applications, which includes both purchase and refinance loans, increased 32.2 percent to 1,159.4 for the week ended March 20. According to the details of the report, refinancing accounted for 78.5 percent of all applications, which is a little disappointing. One hopes that buyers are lagging, but hopefully not far behind.
- Treasury Secretary Timothy Geithner, replacing the usual Federal Reserve Chairman Bernanke, was the celebrity of the week. On Monday Secretary Geithner announced his detailed rescue plan to draw private investors in a partnership with a new federal entity to buy up to $1 trillion in troubled assets. Wall Street praised his efforts to unclog the credit markets, and the result was a surge of 497 points, the largest gain in over sixth months. It was nice to see some cordial relationship returning between the Senate Banking Committee and the Treasury Department!
- Mr. Geithner, making yet another appearance in headlines, also called for broad reforms to curb unnecessary risk on Wall Street. It may be interesting to hear what Czech Prime Minister, and President of the EU, Mirek Topolanek has to say on the plan... New York Times report
- To end the week, on Friday the Commerce Department reported that consumer spending edged up 0.2 percent in February, in line with analyst expectation. This also comes after the 1 percent unexpected bump in January. Both are very positive indicators.
- Locally, much to my surprise, the condo auction at Queen Anne High School received a significant amount of attention. If you missed the results, they can be found here... QA Condominium Auction
Quote/Link of the Week
The familiar saying of John F. Kennedy "when the going gets tough, the tough get going" is probably more relevant today than we've had to endure for years. During these difficult times, creative thinking may be what's needed to persevere and thrive!
As I often do, at this time I would like to invite you to give examples of cost cutting or innovative measures you have taken, or have heard about recently, in an effort to persevere and thrive. Next week, given responses, I will try and highlight some of my favorites. E-mail me your suggestions.
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