Newsletter-April 23rd, 2018    
Provided by
Fred Olson
Fred Olson
Mortgage Options
180 S EUCLID AVE
PASADENA, CA 91101
Phone: (818) 429-4313
Fax: (626) 446-4076
E-Mail: fredolson@sbcglobal.net
 
 

Market Comment

Mortgage bond prices finished the week lower which put upward pressure on rates.  We started with slightly higher rates early Monday morning as data showed economic strength.  Retail sales rose 0.6% versus the expected 0.4% increase.  Removing automobile sales from the data, sales rose 0.2% as expected.  Housing starts and industrial production both were stronger than expected.  Weekly jobless claims printed at 232K and continuing claims, a summation of all receiving benefits, at 1,848K. Weekly claims were expected at 226K and continuing claims at 1,871K.  The Philly Fed survey, an indication of manufacturing activity in the all-important Mid-Atlantic region, printed at 23.2. Traders expected a read of 21.  We ended the week worse by 1/4 to 3/8 of a discount point.


LOOKING AHEAD

Economic
Indicator

Release
Date & Time

Consensus
Estimate


Analysis

New Home Sales

Tuesday, April 24,
10:00 am, et

620K

Important.  An indication of economic strength and credit demand.  Weakness may lead to lower rates.
Consumer Confidence

Tuesday, April 24,
10:00 am, et

128

Important.  An indication of consumers’ willingness to spend.  Weakness may lead to lower mortgage rates.
Treasury Auctions Begin

Tuesday, April 24,
10:00 am, et

None

Important.  2Y Notes on Tuesday, 5Y Notes on Wednesday, and 7Y Notes on Thursday.
Durable Goods Orders

Thursday, April 26,
 8:30 am, et

Up 2.2%

Important.  An indication of the demand for “big ticket” items.  Weakness may lead to lower rates.
Weekly Jobless Claims

Thursday, April 26,
8:30 am, et

235K

Important.  An indication of employment.   Higher claims may result in lower rates.
Q1 Preliminary GDP

Friday, April 27,
8:30 am, et

Up 2.9%

Very important.  The aggregate measure of US economic production.  Weakness may lead to lower rates.
Q1 Employment Cost Index

Friday, April 27,
8:30 am, et

Up 0.6%

Very important. A measure of wage inflation.  Weakness may lead to lower rates.
U of Michigan Consumer Sentiment

Friday, April 27,
10:00 am, et

118 Important.  An indication of consumers’ willingness to spend.  Weakness may lead to lower mortgage rates.

Consumer Confidence

The Conference Board releases the Consumer Confidence Index on the last Tuesday of every month.  The report details the levels of confidence individual households have in the performance of the economy.  The data is derived from a survey of 5,000 households nationwide.  The survey polls consumer opinions on current business conditions, their jobs, their incomes, and their future spending plans.  The Conference Board is a non-profit group that has produced the data since 1967

 

The consumer confidence index is significant in that it provides a precursor into the willingness of consumers to spend in the months ahead.  Consumers are vital to the US economy as consumer spending is a large portion of the gross domestic product.  Manufacturers attempt to gauge consumer spending and adjust production accordingly.  The challenge that many analysts note is the fact that a consumer’s willingness to spend does not always convert to an actual expenditure.

 

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   MORTGAGE MARKET IN REVIEW Newsletter-April 23rd, 2018