Market Commentary 11/20/20

Covid case counts and looming shutdowns continue to drag down the markets. Thankfully, positive vaccine news from Pfizer and Moderna has limited downside volatility. Interest rates continue to trade in a tight range. The Fed has made it clear that interest rates will remain low for the near future to combat the pandemic and to help grease the markets. Some might say in the face of so much uncertainty that the markets are fairly complacent. For example, take a peek at the VIX index, which measures expected near-term volatility. It’s trading in the low 20’s, indicating that for the moment, there’s little risk of a market blow-up. All of that could change in the blink of an eye. We hope the VIX is right and that it’s forecasting better days ahead.

Home sales, both new and existing, remain on a tear. Who would have thought that a pandemic would drive home sales to levels not seen since 2005? Surging sales have been catalyzed by low interest rates, a demand for larger living spaces, and the growth of working from home for many professionals, freeing them up to move further from urban centers. With limited inventory, prices should remain intact even if the pandemic lingers for longer than anticipated. 

Fiscal stimulus is needed to bridge the gap to recovery. With businesses being shut down by the government again, there is only so much pain that they can endure before throwing in the towel. We hope Congress can work this out before the end of the year.  

Insignia’s suite of lenders continues to actively lend and make common-sense decisions. All types of loans remain available, including interest-only loans, loans with co-signors, investment property cash-out refinances, and jumbo loans for foreign nationals. Construction lending has rebounded, as well as bank bridge loans and an assortment of loan types for commercial properties.

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