Good News On Housing, Mortgage Rates, And A Happy Consumer … Early Observations

Last week we had two good personal data points concerning housing which set us in motion for additional research.

With residences being one of the larger assets for many, a downturn in prices i.e. 07-09 … caused pause for much of the consumer due to a drop in asset value, creating a negative feed back loop, thereby lowering confidence and spending.

Things may look different this time.

Initial Data Points On Housing/Residence

The jury is still out on all of this, and we would think commercial i.e. Office Properties, raw land, and other similar assets may see negative pressure initially coming from our current situation and the easy pivot to Virtual ….

However a silent winner, or at least a stabilization of value may be residential. It makes sense as there are usually winners and losers when change occurs.

With two noted sales last week, we set out for more information on what may be occurring.

The MBA Purchase index, (includes all purchase mortgage applications) has bounced back strongly and is back to about 90% of the original tracking high, set just a few months ago. Hat Tip RB, for bringing this to our attention, we were very surprised!

Here is a good chart, which is copyright protected, as such, not included in this post.

Mortgage Rates Lower – Included in the nice bounce back of the Purchasing Index above, are the following updated lower Mortgage rates … a second positive to go with the consumer and residence real estate.

While this lowered mortgage rates took time to develop (blip in chart), due to a dash for cash and a wave of refinance, along with underwriters concerns of consumer credit health, due to heightened unemployment, it does appear lower rates may be adding wind to the sails of residential market.

5-16-20 30 year mortgage rate

Consumer Confidence – One of the most widely followed confidence indexes, the University of Michigan Sentiment index last week released their latest results, and found surprisingly the index jumped higher than expected, mostly based on current situations, likely associated with the light at the end of the tunnel of openings.

Here is a chart from last month, again copyright restricts last weeks results, but this index bounced back to almost 74 last week…again surprisingly.

Certainly headed in the correct direction.

- U of M -

So a hot New Homes Mortgage Purchasing Index, along with lower Mortgage rates and a happier than expected consumer may lead to additional good news for the economy, spending, asset prices, and an eventual return to a more normal!

It’s early, and things could change quickly, but the initial bread crumbs look VERY positive!

Have a Great “Positive Consumer” Day!

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.



Phase 1 Update … A Picture One Week Later in the Same Place … Friday

Two weeks ago today, locally we went to a semi-open Phase 1 opening

Office Buildings are open, but tenants, present party included, are strongly encouraged to visit as infrequent as possible and encourage minimal outside visitors.

We are certainly doing as suggested!

As another example, most private local Clubs (Golf, Tennis etc) in our area are not allowing guests … only members of the clubs and minimal, distanced, visiting activities.

Opening Weekend In Case You Missed It

Here is a picture I took early to mid-day on the weekend of Phase 1 opening, two weeks ago… in case you missed it…


Last Saturday afternoon … you can tell from the shadow, on a bike ride, I took this picture, attempting to get in the exact same spot for reference. For the record I was almost run over three times trying to take the picture…


Again, this is just seven days later of Phase 1, no other changes in Phase levels, or openings by our local or state authorities….

People are beginning to come out, but still minding all the rules.

Today is the Three Week anniversary of Phase 1 release…and a Friday…

Be safe, Be well … and Have a Good Weekend!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.



Updated Capital Market Thoughts, Earnings, Fear Gauge, Interest Rates

We have been very careful in communicating thoughts on the Capital Markets as there are so many unknowns, it’s impossible being extremely accurate.

At the end of the prior quarter when the markets were more like a Bucking Bronco than future economic estimators, we put out our initial thoughts as follows… which so far have been pretty spot on…

Capital Market Participants will anticipate this and begin pricing in the not only conclusion of this economic slow down but the positive affects of the very large stimulus package that has been put into place.

The above being said, we think it appropriate to update you on our thoughts on where we are, and where we may be going …

So here we go …


In normal times earnings determine the movement of the markets. Being in slightly different times, earnings are, and will be bad for the current and likely next quarter. The good news, this is not surprising to anyone.

Market participants are more interested on what it will look like on the other side, as things begin to get closer to a more normal environment.

There will be bumps, there always are, but being forward looking, participants will most likely look even farther ahead than normal and ignore the immediate results.

Major Equity Indexes Worldwide

World Equity Markets… after dropping (most likely overshooting to the downside) rather quickly, moved back up as anticipation of future growth began being priced in …

5-11-20 YTD SP R2k EFA

VIX – Volatility Index – aka Fear Gauge

A few years ago, on December 20, 2017, we commented on the record breaking lows the VIX had made …

Over the last 26 years the VIX has registered a end of the day reading of 10 or less 9 times.

At the close of market just a few days ago, as you can see, 9.42.

Care to guess how many days and counting the VIX closed below 10 in 2017 SO FAR?

49 … FORTY NINE … and counting!

Fast forward to today….  in the high 20’s and low 30’s as of late… down from above 80, which was record breaking in it’s own right….

A Continued lower VIX should be good for Capital Markets.

5-11-20 VIX

Interest Rates

The FOMC, Federal Reserve Open Market Committee, correctly dropped rates to zero as extra stimulus for the situation. Eventually rates got to a lower boundary, see chart below, take notice of the increase in rates before finally settling at a lower range. This represents a dash for cash when original fears commenced. We would be surprised to see rates stay here for a decade, as they were after the great recession of 07-09.

5-12-20 Treasury 10 Year Yield

So where are we going?

Last week we mentioned here in our Edison post, we think a cure will eventually be found, and we still do.

The day those four words are hopefully spoken …

We Found a Cure!

Our lives will change back to more normal, economic growth will pick up and a giant sigh of relief will come across all of our brows as well as a cheerful day/week in capital markets and many otherwise distressed assets.

If a relapse or fear of one occurs, there will be heightened volatility and slower Economic recovery ….

Our bet is on the former rather then the latter, but as mentioned at the beginning, no one really knows.

What Do We Do?

Stick to our allocations, trust the system, and have patience.

Will there be times and items we do not like? Sure, there always are, but we will get through them together!

Oh… and remember, Stay Informed not Consumed! (Over Drama catches the most eyes!)

Have a Great “Updated Market” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.



Neat Animated Chart of Immigration, Which Will Eventually Resume

With much talk of immigration to and from different countries, this chart seemed very interesting.

Of course, this will only continue after travel opens once again, but still interesting from our perch!

USA seems to lead as desired destination, with Russia a very strong second until just recently!

From our Friends at Animated Stats

Have a Great “Visualized Immigration History” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.


Positive Friday … Want to be an Edison? Wave Request

With the worlds biggest and brightest minds working countless hours toward a cure for the Corona …. it may be bad to bet against a cure!

Individuals, Joint Company efforts of their top brass working in teams, and top power house individual companies are working hard….

Want to Be An Edison440px-Thomas_Edison2

Thomas Edison was the most far reaching, well known, and well respected person we could think of, but of course, you can insert someone or company of your own liking.

The Company, Group, or Individual that discovers the cure is likely to become a household name….i.e. Edison

The key person is likely not doing it for the money …(His or her company make like the money!)

He/she is likely not doing it for the fame either …

Most we run into in this type of field are there because their calling is to help as many people as possible …

Can you imagine the sense of urgency someone like this has … to be able to announce the next four words …

We Found a Cure!

More next week on what may happen when those are transmitted across our cell screens….

To think we aren’t getting closer daily, would be to bet against some pretty sharp minds and technology…

Not saying it’s tomorrow… just saying it’s likely out there somewhere!

Now that’s a POSITIVE FRIDAY heading into your weekend!

Oh… do us all a favor  … kindly wave at every stranger you see, it will make you feel better and the stranger too …. Take note of how EVERYONE will kindly waive back with a bit of happiness … What we have noticed!

Have a Great “Want to be an Edison” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.

Amazed How Seamless Virtual Became Reality! … A Cell Phone Comparison

Do you remember your first experience with a Cell Phone ?

Not talking to the youngsters here – haha – you guys should read what happened though!

At first someone else had a cell phone, and they were likely seen as braggers or show offs….mobile-phone-246906__480

Slowly (over years) the stigma subsided and the cost of a cell phone began dropping with incremental speed of use and additional features.

Do you know anyone who does not have a cell phone? Probably Not

Virtual Was Pushed On Us and We Did Just Fine

This week on a Quarterly Earnings Call, a publicly traded company that is directly in the middle of Virtual said…

“In Two Months Over Two Years of Integration in Virtual Just Occurred”

Isn’t that pretty cool!

We should all pat ourselves on the back!

Only thing needed is an internet connection …  most phones now double as Hotspot … trouble easily averted

Stigma is Gone on Virtual meetings and get together’s …

Countless talk by tons of Smaller offices …

Less Travel Expense …

Yea, maybe a bit more impersonal …

Nothing will ever replace Face To Face, a nice hug or handshake !!

Given the circumstances … nice welcomed pivot!

Have a Great “Virtual Embraced” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.


Phase 1 Release Observations … Slower to Come Out than Most Expected

On Friday, May 1, 2020 … Dallas Proper moved from stay in place to Phase 1 opening, with continued suggested stay in place recommendation.

Restaurants were open with 25% occupancy maximums.

Malls were also open with shorter hours, i.e. 10 am to 6 pm with similar low occupancy regulations.

Masks are mandatory in any high volume area and for the most part most stores would not allow you in unless you had a mask.

Phase 1 Observations

Doing what Financial Planning nerds do, the entire weekend was spent checking the pulse of the consumer….

Here are the observations from across the City of Dallas ….

On Friday, a trip to the office for mail pickup revealed, zero …. nada, folks back at the office as well as surrounding office buildings ….

Again on Friday, it looked like about a 10% store opening rate and about the same amount of crowds.

Saturday moved up to about 15% crowd at one of the largest malls in the City.

A local strip center of mostly independent stores, was empty, with about a 5-10% participation rate among patrons, but with about 30-40% stores opening….usually cannot find a parking space – see picture below


Sunday seemed slightly slower than Saturday, across the board.

Oddly, a chance trip to a neighborhood Home Depot was stunning…. Never have seen the parking lot as full, could barely find a spot to park, and people were actually parking on the grass ….

Everyone was wearing a mask, and a chance chat with a manager while attempting to find my mandatory needed item, revealed the store had been this way from the beginning and when lock down measures were taken, allowing only 150 people in the store at a time, lines were hours long to get in …. hmmmmm

For those still on complete lock down (Donald The Brain and MANY more) it will be interesting to see how those with longer down time re-emerge?

The great news is everyone is certainly taking this serious, and that creates our own success!

Have a Great “Phase 1 Observations” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.