Weekly Stock Market Update From Becky Smith
December 14, 2008 by admin
Filed under Day Trading
Each week 2007 Winner of the Beat The Street Contest, Becky Smith post a Weekly Stock Market Update. You can read those updates here. We have posted her update this week here for all the new readers to see and comment. Enjoy!
This was another week that had bad news and yet the market did not fall off a cliff. At the start of the week the market was up on the expectation the government was going to provide some sort of funding for the auto makers. All week the markets expected news, Friday we found out the bill failed to pass. I fully expected the markets to crash and we ended the day up 64.59 points.
Realty Trac reported that foreclosure filings dropped 7% from October to November which sounds like good news, right? I don’t think so. Considering that there is a moratorium that has been enacted by some lenders, and that foreclosures are up 28% from November of last year. I believe that once the moratoriums are lifted and new rounds of interest adjustments are made I believe we will have another massive wave of foreclosures coming. Yet bank stocks are rising because interest rates on 30 year loans have fallen to a 4 year low of 5.47% from 5.98% last week and mortgage applications rose 112% week over week, with the percentage of fixed mortgage applications rising 115%. The fall in interest rates is also good for the home builders even thought we found out that there is an 11 month supply of homes in builder inventory which means that prices will continue to come down. Check the charts of the banks and home builders since December 1st, a definite up trend is forming if the markets can continue discounting the bad news. I believe the trend continue for a while but will only be temporary, we are in a bear market and I think this is a bear market bounce.
Monday, if we get money from the tarp for the automakers I think we will see a bounce in the many auto suppliers. So keep your eyes on them.
Until next time whether you are long or short may all of your trades be profitable!!
Becky