Today is Wednesday, August 26 and stock futures are were mixed early today after the S&P closed at a new record high yesterday. The Federal Housing Finance Agency delays the implementation of the Adverse Market Refinance Fee until December 1, 2020. The Fed looks likely to hold rates at zero for at least the next few years as it adapts a new monetary policy. Mortgage demand has spiked 33% annually and another wave of restaurant bankruptcies is likely on the horizon. In addition, many investment firms are waiving their charges on money funds to keep the yields that investors earn from dropping below zero
U.S. stock futures were mixed early Wednesday after the S&P 500 closed at a new record high. Dow futures implied an opening loss of around 26 points. The S&P 500 futures contract stood just above the flatline while Nasdaq 100 futures traded in positive territory.
The Federal Housing Finance Agency (FHFA) today directed Fannie Mae and Freddie Mac (the Enterprises) to delay the implementation date of their Adverse Market Refinance Fee until December 1, 2020. The fee was previously scheduled to take effect September 1, 2020. FHFA is also announcing that the Enterprises will exempt refinance loans with loan balances below $125,000, nearly half of which are comprised of lower income borrowers at or below 80% of area median income. Affordable refinance products, Home Ready and Home Possible, are also exempt.
The Federal Reserve looks likely to keep short-term interest rates near zero for five years or possibly more after it adopts a new strategy for carrying out monetary policy. The new approach, which could be unveiled as soon as next month, is likely to result in policy makers taking a more relaxed view toward inflation, even to the point of welcoming a modest, temporary rise above their 2% target to make up for past shortfalls.
Industry analysts and restructuring experts say another wave of restaurant bankruptcies is looming, as government funds run out and the cooler months roll around, making outdoor dining less viable. “Pre-pandemic, you were already over-saturated with restaurants,” said Michael Jerbich, president of B. Riley Real Estate. “Then the pandemic comes, and you have the perfect storm.” Some restaurant landlords have struck short-term deals with their tenants, dramatically slashing base rent and asking for a percentage of sales instead because they know it could be tough to find new tenants.
Many investment firms are waiving their charges on money funds to keep the yields that investors earn from dropping below zero. Money-management giant BlackRock Inc. is waiving costs typically borne by customers for certain money-market funds to prop up investor yields, said people familiar with the matter. Fidelity Investments, Federated Hermes Inc. and J.P. Morgan Asset Management are also ceding some fees to stave off negative yields.
Mortgage applications to purchase a home rose just 0.4% last week from the previous week but were a remarkable 33% higher than a year ago, according to the Mortgage Bankers Association. Pent-up demand from the disastrous spring market and the new stay-at-home mindset combined to send more consumers rushing to either buy homes for the first time or upgrade what they already have. Low mortgage rates are only adding fuel to the fire.