Stock Market Suffers Worst Week in Recent Memory – Market Update

Quicken Loans Market Update - Zing Blog

Last Week:

Headline News

  • Jobless Claims – At a lower-than-expected 326,000 last week, jobless claims are now signaling some improvement. The Econoday census had been looking for 333,000. The four-week average is down 3,750, which is more than 10,000 lower than the month-ago comparison to offer an indication of strength for the January employment report.
  • Existing Home Sales – Sales of existing homes bounced back in December from a very weak November. However, the outlook for future sales is not good, at least based on the supply of homes on the market, which fell sharply.
  • FHFA House Price Index – The housing market may be losing some momentum based on the latest home prices. According to the FHFA, home prices rose a modest 0.1% on a seasonally-adjusted basis, following a 0.5% increase the prior month.
  • Consumer Comfort Index – Consumer confidence was little changed last week at a one-month low. American views of current economic conditions improved to -58.1 from a one-month low of -60.1 a week prior.

Mortgage Rates

According to the Primary Mortgage Market Survey released by Freddie Mac, average mortgage rates fell slightly for the second consecutive week amid reports that inflation remains subdued.

30-year fixed-rate mortgages (FRM) averaged 4.39% with an average 0.7 point for the week ending January 23, 2014, down from last week when it averaged 4.41%. A year ago at this time, the 30-year FRM averaged 3.42%.

15-year FRM this week averaged 3.44% with an average 0.7 point, down from last week when it averaged 3.45%. A year ago at this time, the 15-year FRM averaged 2.71%.

5-year Treasury-indexed hybrid adjustable-rate mortgages (ARM) averaged 3.15% this week with an average 0.5 point, up from last week when it averaged 3.10%. A year ago, the 5-year ARM averaged 2.67%.

1-year Treasury-indexed ARM averaged 2.54% this week with an average 0.5 point, down from last week when it averaged 2.56%. At this time last year, the 1-year ARM averaged 2.57%.

Equity Markets

The Dow Jones Industrial Average dropped nearly 320 points Friday, which is nearly 2%. The S&P 500 and NASDAQ both fell more than 2%, ending a week that marked the worst week for stocks in recent memory. For the week, the Dow dropped more than 3.5%, suffering its worst week since November 2011.

The Week Ahead

Monday, January 27

New Home Sales (10 a.m. ET) – New home sales measure the number of newly constructed homes with a committed sale during the month. The level of new home sales indicates housing market trends and, in turn, economic momentum and consumer purchases of furniture and appliances.

Tuesday, January 28

S&P Case-Shiller HPI (9 a.m. ET) – The S&P/Case-Shiller home price index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S. The composite indexes and the regional indexes are seen by the markets as measuring changes in existing home prices and are based on single-family home re-sales.

Consumer Confidence (10 a.m. ET) – The Conference Board compiles a survey of consumer attitudes on the economy. The headline Consumer Confidence Index is based on consumers’ perceptions of current business and employment conditions, as well as their expectations for six months regarding business conditions, employment and income.

Wednesday, January 29

FOMC Meeting Announcement (2 p.m. ET) – The Federal Open Market Committee (FOMC) is the policy-making arm of the Federal Reserve. It determines short-term interest rates in the U.S. when it decides the overnight rate that banks pay each other for borrowing reserves when a bank has a shortfall in required reserves.

Thursday, January 30

Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smoothes out weekly volatility.

GDP (8:30 a.m. ET) – Gross Domestic Product (GDP) is the broadest measure of aggregate economic activity and encompasses every sector of the economy.

Pending Home Sales (10 a.m. ET) – The National Association of Realtors developed the pending home sales index as a leading indicator of housing activity. Specifically, it is a leading indicator of existing home sales, not new home sales. A pending sale is one in which a contract was signed, but not yet closed.

Visit the Quicken Loans Zing Blog for updated information on important economic releases that affect your wallet.

 

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