Here we go again? It seems stocks can’t hold their gains and a somewhat of a meager attempt at a comeback is falling short. It didn’t seem that too long ago that the DJIA was having trouble staying above the 18000 mark and bounced up and down and around that for months. Then China, thenstocks bonds real estate consecutive triple digit losses then rounds of tepid economic news as well as disappointing data.

Of course, real estate investors are enjoying the lower financing costs as a 15 year interest rate for a 1-4 investor property is around 3.5% today. It looks like the next support level will be 16000. That’s 2000 lower than the 18000 ceiling. That’s a correction of more than 10%.

Yes, the Fed meets later this month but it’s been a tug-of-war between those who think the Fed will cut and those who think the Fed will do nothing. There really has been no consistent data to support stocks in general or provide some sort of guidance and when that happens money flows out of equities and into mortgage bonds and federal debt. Just today the Institute for Supply Management (ISM) reported the manufacturing sector crawled in August to a level not seen in more than two years. While the index came in at 51.1 (anything above 50 indicates growth) for August, it was 52.7 in July.*

The 10-yr yield briefly fell below 2.00% last week and today is barely above that mark. The benchmark FNMA 30yr 3.5 is up slightly at 103.24, keeping a lid on mortgage rates. For rates to get too much lower there will need to be another correction but many investors are thinking (hoping) today’s triple digit fall is nothing more than a re-test of the current floor of 16000. We’ll see over the next few days but look out for Friday’s job creation numbers. That will be the next big data dump one week before the next round of FOMC meetings.

* September 1, 2015