Quick Win by the Algorithm: FMCC up 68.54% in the Last Month

Quick Win by the Algorithm

On November 11, 2016, the I Know First algorithm had predicted a bullish forecast for Federal Home Loan Mortgage Corporation (FMCC). FMCC had a signal of 143.90 and a predictability of 0.38. In accordance with the algorithm, the company reported long-position capital gains of 68.54% experiencing a quick win by the algorithm.

fmcc stock forecast

Federal Home Loan Mortgage Corporation (stock symbol — FMCC), also known as Freddie Mac, is a public, government-sponsored enterprise that supports the liquidity, affordability, and stability of the housing market. This support consists of purchasing loans from mortgage lenders so that they may offer more loans to borrowers. Freddie Mac is regulated by the Federal Housing Financial Agency and their headquarters are located in McLean, Virginia. They operate on three lines of business, including Single-Family, Multi-Family, and Investment. 16,000 buyers avoided foreclosure while 88% retained their home Freddie Mac revealed in their third quarter ending on September 30, 2016. During this quarter, they had reported a net income of $2.3 billion.


FMCC stock’s price rose 68.54% in 1 month. This, in a large part, is due to the results of the U.S. elections. President-elect Donald Trump has announced that he would be committed to tax cuts and invest in infrastructure. Given that people would have more money, the economy would grow and inflation is likely. Anticipated inflation elevates the costs of borrowing and therefore mortgage rates intensified in the past month. To counteract the proclaimed inflation, the Federal Reserve hikes up the interest rates. The economy would slow with less money in people’s pockets, so inflation decreases. With low rates in the last few years, risk-taking was encouraged. Though too much risk can be a bad thing, so this along with inflation has convinced the Fed’s to increase the interest rate.freddie-mac-graph

The increase in rates and borrowing costs convinced some families to buy or rent a home sooner, rather than later. Freddie Mac benefited and financed more families at a higher borrowing price. Fixed mortgages historically, are not the highest they have been. Rates soared up to 10% roughly 30 years ago. A 30-year fixed mortgage a year ago was 3.95 %. Today, for the same 30-year mortgage, the rate is roughly 4.13%. Rates should continue its trend as the Federal Reserves and President-elect Donald Trump will continue to balance each other. Freddie Mac will likely stay on its path of increased rates until inflation slows and new plans are announced by the President-elect.

This bullish forecast on FMCC was sent to current I Know First subscribers on November 11, 2016.

Before making any trading decisions, consult the latest forecast as the algorithm constantly updates predictions daily. While the algorithm can be used for intra-day trading the predictability tends to become stronger with forecasts over longer time-horizons such as the 1-month, 3-month and 1-year forecasts.