The Market Bull – February 11, 2020
The major averages closed about even on little real news. The Coronavirus spread seems to be slowing markedly, particularly outside of China.
The Mortgage Bankers Association reports that mortgage delinquencies continue to slip as a strong labor market, falling interest rates and higher home prices all continued to work their magic in the 4th quarter pushing the delinquency rate down to 3.77%. Loans entering the foreclosure process rose 1 basis point to 0.22%. This rate remains very low by historical standards.
Despite record or near record debt levels almost everywhere you look. Home Equity Lines of Credit or HELOC’s continue to decline in the post Great Financial Crisis or GFC period. A positive development as HELOC’s played an outsize roll in tipping homeowners into bankruptcy and foreclosure during the GFC. The banks, always eager to loan money as much of their earnings come from the interest payments have tried mightily in the post GFC period to encourage HELOC use, so far with no luck as balances have retreated to levels last seen in 2004 at 317 billion. Even the Fed got in on the act when former NY Fed president William Dudley lamented in a speech that households have refused to turn home equity into retail sales and GDP growth. Total HELOC balances at all lenders, including nonbanks, plunged 48% from $714 billion in Q1 2009 to just $317 billion at the end of last year.
Standard and Poors 500 Index closed at: 3,357.76 up 5.67
NASDAQ finished the day: 9,638.94 up 10.55
Gold ended trading at: $1,571.30 down $8.20