Fully convinced the Fed will keep interest rates low well into next year as a result of yesterdays’ Fed comments, investors sent both the Dow and S&P 500 to record levels yet again closing at 1725.99 and 2011.36 respectively. The NASDAQ was also up, closing at 4593.43. The thinking is higher rates rate forecast for 2015sooner will slow down the economy, part of the Fed’s job when inflation is an issue. 

 The economy is showing signs of relative strength in certain sectors and the price decline of oil has been a nice surprise, this in spite of turmoil in the Mideast. Yet signals can be mixed and the disappointing unemployment report and non-farm payroll jobs numbers for August are thought to be an aberration. We’ll soon see when August revisions are released along with September counts. While the unemployment rate for August was slightly lower than the 6.1% expected there were only 142,000 new jobs created according to the report. This paltry number has convinced many traders there’s a mistake in the math somewhere and it will be discovered October 3rd when Septembers report is released by the Department of Labor.

Next week’s economic reports provide both Existing and New Home Sales, Durable Goods orders and the third revision of Q2 GDP, although many investors at this stage will take little notice of the third revision. With the Fed Funds rate effectively at zero, the Fed did suggest a more rapid clip when ultimately deciding to increase rates with the Fed fund target close to 1.375 percent. That would equate to a 30 year mortgage rate for an investor’s single family home purchase closer to 5.50 percent, from 4.25 percent today.