Newsletter
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Existing
Consumer Sentiment Rises in
January for Fifth Monthly Gain:
A measure of consumer sentiment
rose in January for the fifth
straight monthly gain, according
to data released Friday, as job
gains helped put worries about
U.S. government finances in the
background.
The final January reading of the
University of Michigan/Thomson
Reuters gauge of consumer
sentiment reached 75.0, compared
to a preliminary report of 74.0
and a December reading of 69.9.
The sentiment gauge, which
covers how consumers view their
personal finances as well as
business and buying conditions,
averaged about 87 in the year
before the start of the most
recent recession.
Recent job growth has been
improving, though still well
below the pace needed to bring
unemployment significantly below
the 8.5% rate it was last month.
Obviously, this is important to
housing. As consumers
feel better about the economy,
the more likely they are to
purchase a home.
What Happened to Rates Last
Week?
Mortgage backed securities (MBS)
gained +150 -91 basis points
from last Friday to the prior
Friday which moved mortgage
rates to their lowest level in 4
months.
This was a complete reversal
from the previous week where we
lost -91 basis points.
MBS shot up (and therefore
mortgage rates moved lower)
primarily for three reasons.
Front and center was the Fed.
The Fed left their key interest
rates alone but made a statement
that their fed fund rate would
essentially be zero until 2014
which caused MBS to rally.
Also the 4th QTR GDP numbers did
show economic growth at 2.8% but
fell short of the market
expectations of 3.0%. This
helped mortgage rates because
this report was not
inflationary.
U.S. bonds also benefited from
concerns in Europe that the
renegotiations between Greece
and their bond holders was not
going well. This could trigger
Greece to finally default and
cause some additional financial
instability in the region.
What to Watch Out For This Week:
The following are the major
economic reports that will hit
the market this week. They each
have the ability to affect the
pricing of Mortgage Backed
Securities and therefore,
interest rates for Government
and Conventional mortgages. I
will be watching these reports
closely for you and let you know
if there are any big surprises
|
Date |
Time |
Economic Release |
|
30-Jan |
8:30 |
PCE (MoM) |
|
30-Jan |
8:30 |
Core PCE (MoM |
|
30-Jan |
8:30 |
Core PCE (YoY) |
|
30-Jan |
9:55 |
PCE (YoY) |
|
30-Jan |
8:30 |
Pesonal Income |
|
31-Jan |
9:00 |
S&P Case-Shiller Home Price Index |
|
31-Jan |
9:45 |
Chicago Purchasing Managers Iindex |
|
31-Jan |
10:00 |
Consumer Confidence |
|
1-Feb |
7:00 |
MBA Mortgage Applications |
|
1-Feb |
8:15 |
ADP Employment |
|
1-Feb |
10:00 |
Consutruction Spending |
|
1-Feb |
10:00 |
ISM Manufacturing |
|
1-Feb |
10:00 |
ISM Prices Paid |
|
1-Feb |
10:30 |
EIA Crude Oil Stocks |
|
1-Feb |
17:00 |
Total Vehicle Sales |
|
2-Feb |
8:30 |
Initial Jobless Claims |
|
2-Feb |
8:30 |
Continuing Jobless Claims |
|
2-Feb |
8:30 |
Nonfarm Productivity |
|
2-Feb |
8:30 |
Unit Labor Costs |
|
3-Feb |
8:30 |
Average Weekly Hours |
|
3-Feb |
8:30 |
Nonfarm Payrolls |
|
3-Feb |
8:30 |
Avg. Hourly Earnings (MoM) |
|
3-Feb |
8:30 |
Avg. Hourly Earnings (YoY) |
|
3-Feb |
8:30 |
Unemployment Rate |
|
3-Feb |
10:00 |
Factory Orders |
|
3-Feb |
10:00 |
ISM Non-Manufacturing |
It
is virtually impossible for you to
keep track of what is going on with
the economy and other events that
can impact the housing and mortgage
markets. Just leave it to me, I
monitor the live trading of Mortgage
Backed Securities which are the only
thing government and conventional
mortgage rates are based upon.
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