Economic update for the week ending March 12, 2022

Stock markets closed lower for a fifth straight week – The Dow fell for its fifth straight week as investors try to determine just how bad the economic impact the war in Ukraine will have on American companies. Persistent inflation which was going on well before the Russian invasion has been exuberated by soaring fuel costs as the world has partially cut off Russian oil. The February CPI report was released on Thursday. It showed that consumer prices had risen 7.9% year-over-year in February. That marks the highest inflation rate since 1982. American companies have also joined the boycott and stopped selling goods in Russia. That will impact their profits. It was a tough week for investors. The Dow Jones Industrial Average closed the week at 32,944.19, down 2.0% from 33,614.17 last week. It is down 9.4% year-to-date. The S&P 500 closed the week at 4,204.31, down 2.8% from 4,326.87 last week. The S&P is down 11.8% year-to-date. The NASDAQ closed the week at 12,843.81, down 3.5% from 13,314.44 last week. It is down 17.9%, year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 2.00%, up from 1.74% last week. The 30-year treasury bond yield ended the week at 2.36%, up from 2.16% last week. We watch bond yields because mortgage rates often follow treasury bond yields.

Mortgage rates – The March 10, 2022, Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products were as follows: The 30-year fixed mortgage rate was 3.85%, up from 3.76% last week. The 15-year fixed was 3.01%, up from 3.09% last week. The 5-year ARM was 2.97%, up from 2.91% last week. Following the release of the February CPI report that showed inflation had risen 7.9% year-over-year on Thursday, mortgage rates have risen sharply. The 30-year fixed rate is well over 4% today.

Home sales figures for February will be released next week by the California Association of Realtors. You can get a detailed market report for your city or zip code now from my website. It has all February home sales numbers.

It is uncomfortable making a statement that it was a tough week for investors in light of what is going on in Ukraine. It was a tragic week for Ukrainians with unimaginable death and destruction. Rodeo Realty prays for an end of the war.