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Mortgage Rate Update 2/1/2021

Hello, hello. What’s up friends, Facebook, YouTube, wherever? Hey, maybe our website, wherever you happen to be watching us today. I’m Sean Zalmanoff and I’m here with your mortgage rate update and just sending a few cheers your way this morning.

The first week of the month is always a very potentially market-moving big week in both stocks and in mortgage bonds, which are why you’re tuning in today. Of course, you’re going to have a … we’re going to talk about GameStop in a little bit because we just wouldn’t be any kind of financial advice or whatever we are today if we didn’t talk about GameStop and how that’s going to affect you. But first let’s talk about jobs, jobs, and jobs.

The first Friday of every month, that does not fall on the actual first day of the month, so this Friday I think is the 5th of February, the Bureau of Labor Statistics will release both government and non-government Bureau of Labor Statistics farm and non-farm payrolls. And so we’ll get those numbers on Friday. We’ll get a little precursor to the private sector on Wednesday when ADP, the largest national payroll company, which is why people hinge on what they said they’ll release some stats. So those are things that are potentially market-moving.

Man, we had a crazy week in the stock market last week. As you guys probably saw, I think the whole world knows about GameStop now. That was a stock that was trading just like a month ago or a little short while ago for a couple bucks a share. Then it was like five. Then it was like 10. And at one point last week, that puppy was like $480 a share as a group of Reddit investors on a channel inside of there called WallStreetBets decided that they were going to put a squeeze on some institutional hedge funds that had a huge short position inside of there. They started buying a ton of the stock and then it forced the hedge funds to also then buy the stock to cover the short position.

What does that have to do with me? Well, there was a couple of days last week the stock market tanked. Because of that, we saw some improvements of rates, but that was in the midst of the $1.9 trillion economic stimulus plan that had been released that is being met with a lot of opposition, definitely by Republicans and by some Democrats too because of the size of the bill. I think as we are speaking right now or as I’m talking to you, Biden and 10 Republicans are meeting to propose or to work on a compromise and the Republicans have a proposed smaller stimulus bill in place. Regardless of the stimulus and exactly how you sit on that, the important thing for interest rates on that is the greater the stimulus bill, the higher the chance of inflation and the higher the chance of inflation as you know, as I love to say, inflation is the arch enemy of bonds. And so it’s the archenemy of mortgage backed securities. If inflation goes up, rates will go up.

Selfishly, we want rates to stay low so you can refinance, you can purchase, you can do whatever it is that you need to do in your world to take advantage of incredibly inexpensive money. Hey, so I am Sean Zalmanoff. Myself, Gordon, Derek, Megan, Katie, Emily, Tasha, we’re all here and, I don’t think I left anybody out. Hey, if I left you out, just know you’re still important to me, team. And hey, we’re here for you though. We appreciate you all. Have an awesome Monday. See ya.

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