Stock markets surged to record highs in October – Stocks rebounded in October as investors were encouraged by a number of factors. Among the most notable was a drop in COVID-19 cases across the country, third quarter corporate profits mostly exceeding expectations, and a proposed increase of the corporate tax rate was removed from the latest spending plan. The Dow Jones Industrial Average closed the month at 35,819.56, up 5.8% from 33,843.92 at the end of September. It is up 16.9% year-to-date. The S&P 500 closed the month at 4,605.38, up 6.9% from 4,307.54 last month. It is up 22.7% year-to-date. The NASDAQ closed the month at 15,498.39, up 7.3% from 14,448.50 last month. It is up 20.3% year-to-date.
U.S. Treasury bond yields – The 10-year treasury bond closed the month yielding 1.55%, up from 1.52% last month. The 30-year treasury bond yield ended the month at 1.93%, down from 2.08% last month. We watch bond yields because mortgage rates often follow treasury bond yields.
Mortgage rates – The October 28, 2021, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate was 3.14%, up from 3.01% last month. The 15-year fixed was 2.37%, up from 2.28% last month. The 5-year ARM was 2.56%, up from 2.48% last month. Rates dropped on the 28th and 29th. The 30-year ended the month just above 3%.
U.S. employers added 194,000 jobs in September – The Department of Labor and Statics reported that 194,000 new jobs were added in September. That number disappointed analysts as economists surveyed had predicted 500,000 new jobs. August’s new jobs number was revised up to 366,000 from an initial report of 245,000 jobs added, but it’s still a long way off from the nearly 1 million new jobs added monthly up to July 2021. The slowdown in hiring over the past two months is a trend which has everyone concerned that the recovery may be stalling. Experts pointed to a pullback in hiring due to a surge in new COVID cases in August, but new cases were on the decline in September and hiring continued to slow. Average hourly wages rose 4.6% year over year. Many workers have also left the workforce. The labor-force participation rate, (the share of workers with a job or actively looking for a job), dropped to 61.6%, down from 63.6% before the pandemic. The unemployment rate was 4.8% in September, down from 5.2% in August. It has fallen from a high of 14.8% at the start of the pandemic, but is a long way off from its 3.5% rate before the pandemic.
Sources:
- Rodeo Realty, Inc.