Markets Untethered.

We are probably at the point where rumors of a comprehensive settlement of the Straits of Hormuz crisis by a UFC match on the front lawn of the White House would produce a stock market rally and an oil futures collapse in price. It is way out of my wheelhouse to discuss geopolitics or even mere politics but even I can say that if you read a good selection of geopolitical experts you would soon realize that there is as much chance of this being over soon and energy markets returning to normal as there is of a resurgence of the Kharg Island tourist business – don’t laugh. It’s a thing!

How does this affect the Midwest property market?

Well, the effects will be felt. Energy inflation is felt by everyone in pretty much everything, and that is something we cannot change and it will run its course and make everyone very unhappy, and not just at the pump. The trends before this geopolitical tsunami were not even so great. 

ADP released its March Jobs Report. This showed that 62,000 jobs were created in the month. This was stronger than the 40,000 expected, but still a relatively weak number and apparently 3 out of every 4 jobs created were health and education related. We are not seeing anything good in tech and manufacturing sectors – the opposite as tech fIrms make big cuts in jobs allegedly due to ‘AI’. Count me a bit of a cynic on that.

We cannot expect any interest rate hikes this year and probably will see some cuts so that at least is a stabilizing factor in the mortgage markets. 

THE GOOD NEWS:

Midwest economic factors are still pretty immutable. We do not have enough housing stock to meet demand and prices will likely be less impacted than coastal markets where there is a lot more inventory. So, call me if you want to sell your home!

Humor may be the best strategy. Inspired by a politician’s recent gaffe of calling a certain narrow water way the Straits of Vermouth, (one sympathizes) I now drink a Hormuz Fire each night. Two parts gin, one part Aperol topped up with tonic. It may not open the straits but it keeps me flowing freely before dinner.