Adam in CO
01-18-2008, 06:50 PM
Mortgage Market News for the week ending January 18, 2008
Events This Week:
Retail Sales Fell
Inflation Steady
Housing Starts Down
Manufacturing Weak
Events Next Week:
Thur 1/24
Existing Home Sales
Jobless Claims
Mortgage Rates Lower on Weak Data
Investor concerns about slower economic growth hurt the stock market but pushed mortgage rates to the lowest levels since the summer of 2006. Nearly all of last week's economic data indicated weakness in economic growth, which was good news for mortgage markets, since it generally means less future inflation. December Retail Sales fell well short of expectations, and the November data was revised lower as well. The Philly Fed regional manufacturing index came in far below the consensus forecast, at the lowest level since October 2001. Meanwhile, the monthly inflation data released last week contained few surprises. The December Core Consumer Price Index matched the consensus forecast, rising at a 2.4% annual rate, and the December Core Producer Price Index also came in right on target.
Thursday, Fed Chief Ben Bernanke testified before Congress, and investors scrutinized his words carefully. Essentially Bernanke suggested that the risks for slower economic growth had increased, but that the current Fed forecast was for a positive growth rate, rather than negative growth. A recession is defined as two consecutive quarters of negative economic growth, but the Fed currently does not expect that to happen. Bernanke repeated that the Fed stands ready to take aggressive action to stimulate the economy if necessary. Investors now price in a near certainty of a half point rate cut at the next meeting on January 30.
In the housing sector, the news was mixed. December Housing Starts fell -14%, far below the consensus forecast, and Building Permits, a leading indicator of future housing market activity, declined -8%. On a more positive note, the January National Association of Home Builders (NAHB) housing activity index rose slightly, posting its first gain in almost a year.
Also Notable:
Economists revised lower their forecasts for economic growth in Europe
The Bush Administration proposed an economic stimulus plan
The Dow stock index fell by about 600 points last week
Oil prices retreated to $90 per barrel, down from record levels just below $100 per barrelAverage 30 yr fixed rate:
Last week:-0.12%
This week:-0.13%
Stocks (weekly):
Dow:12,108-618
NASDAQ:2,342-124
Week Ahead
Next week, the Economic Calendar will be virtually empty. Existing Home Sales and Jobless Claims will be released on Thursday. Investors will be looking ahead to the next FOMC meeting on January 30 at which the Fed is expected to cut rates by one half point. Mortgage markets will be closed on Monday in observance of Martin Luther King Day.
admin@corefinancegroup.com (dadmin@corefinancegroup.com)
Events This Week:
Retail Sales Fell
Inflation Steady
Housing Starts Down
Manufacturing Weak
Events Next Week:
Thur 1/24
Existing Home Sales
Jobless Claims
Mortgage Rates Lower on Weak Data
Investor concerns about slower economic growth hurt the stock market but pushed mortgage rates to the lowest levels since the summer of 2006. Nearly all of last week's economic data indicated weakness in economic growth, which was good news for mortgage markets, since it generally means less future inflation. December Retail Sales fell well short of expectations, and the November data was revised lower as well. The Philly Fed regional manufacturing index came in far below the consensus forecast, at the lowest level since October 2001. Meanwhile, the monthly inflation data released last week contained few surprises. The December Core Consumer Price Index matched the consensus forecast, rising at a 2.4% annual rate, and the December Core Producer Price Index also came in right on target.
Thursday, Fed Chief Ben Bernanke testified before Congress, and investors scrutinized his words carefully. Essentially Bernanke suggested that the risks for slower economic growth had increased, but that the current Fed forecast was for a positive growth rate, rather than negative growth. A recession is defined as two consecutive quarters of negative economic growth, but the Fed currently does not expect that to happen. Bernanke repeated that the Fed stands ready to take aggressive action to stimulate the economy if necessary. Investors now price in a near certainty of a half point rate cut at the next meeting on January 30.
In the housing sector, the news was mixed. December Housing Starts fell -14%, far below the consensus forecast, and Building Permits, a leading indicator of future housing market activity, declined -8%. On a more positive note, the January National Association of Home Builders (NAHB) housing activity index rose slightly, posting its first gain in almost a year.
Also Notable:
Economists revised lower their forecasts for economic growth in Europe
The Bush Administration proposed an economic stimulus plan
The Dow stock index fell by about 600 points last week
Oil prices retreated to $90 per barrel, down from record levels just below $100 per barrelAverage 30 yr fixed rate:
Last week:-0.12%
This week:-0.13%
Stocks (weekly):
Dow:12,108-618
NASDAQ:2,342-124
Week Ahead
Next week, the Economic Calendar will be virtually empty. Existing Home Sales and Jobless Claims will be released on Thursday. Investors will be looking ahead to the next FOMC meeting on January 30 at which the Fed is expected to cut rates by one half point. Mortgage markets will be closed on Monday in observance of Martin Luther King Day.
admin@corefinancegroup.com (dadmin@corefinancegroup.com)