Market Comment – November 20, 2015
(this is from a newsletter I follow – The Mortgage Market in Review)
Mortgage bond prices finished the week higher, which pushed rates lower. The data was generally as expected. Consumer prices rose 0.2% and the core rate, which excludes volatile food and energy costs, also rose 0.2%. Housing starts were weaker than expected at 1,060. Market participants looked for starts of 1,160K. Weekly jobless claims were 271K versus the expected 272K. The Philadelphia Fed survey rose 1.9% versus the expected 1% decline. Leading economic indicators rose 0.6% as expected. Mortgage interest rates finished the week better by approximately 1/4 of a discount point.
LOOKING AHEAD
| Economic Indicator |
Release Date & Time |
Consensus Estimate |
Analysis |
| Existing Home Sales | Monday, Nov. 23, 10:00 am, et |
5.55M | Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates. |
| Treasury Auctions begin | Monday, Nov. 23, 1:15 pm, et |
None | Important. Notes will be auctioned. Strong demand may lead to lower mortgage rates. |
| Q3 GDP | Tuesday, Nov. 24, 8:30 am, et |
Up 1.5% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Consumer Confidence | Tuesday, Nov. 24, 10:00 am, et |
97.4 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| Weekly Jobless Claims | Wednesday, Nov. 25, 8:30 am, et |
269K | Important. An indication of employment. Higher claims may result in lower rates. |
| Personal Income and Outlays | Wednesday, Nov. 25, 8:30 am, et |
Unchanged, Up 0.1% |
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Wednesday, Nov. 25, 8:30 am, et |
Up 0.1% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| Durable Goods Orders | Wednesday, Nov. 25, 8:30 am, et |
Down 0.6% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| U of Michigan Consumer Sentiment | Wednesday, Nov. 25, 10:00 am, et |
93.3 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| New Home Sales | Wednesday, Nov. 25, 10:00 am, et |
474K | Important. An indication of economic strength and credit demand. Weakness may lead to lower 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 consumer confidence index is significant in that it provides a precursor into consumers’ willingness to spend in the months ahead. However, many analysts point out that willingness to spend does not always convert to actual expenditures.
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