30 year fixed mortgage rates continue in the low 5’s to start the week. It’s earnings season for stocks so good reports could pressure bonds and drive rates up. Alcoa reports 4th quarter earnings after the close of the market today. Several forecasters are predicting a 10-14% rise in the stock market this year. Some Fed members have said in recent speeches that the Fed should continue mortgage backed security purchases beyond the March commitment. That’s good news because it could help keep mortgage rates low.
Facts:
In November of 2007, the Fed forecast unemployment to range near 4.9% for 2009. It ended the year at 10.0%.
In December 2008, a Chase strategist predicted that the S&P 500 would end 2009 at 1100. The S&P finished the year at 1115.
70% of investors were Bearish on 3/11/09; 2 days after the S&P 500 hit a Bear market low. Today only 26% of investors identify themselves as Bearish.
It would appear that going opposite the prevailing sentiment has its value since the March low represented a great buying opportunity. The S&P 500 is up +72.4% since then.
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