Market UpdateHeadline News

Durable Goods Orders – Orders dropped 3.4% in December. Analysts had expected a 0.7% increase. Transportation dove 9.2%. Though motor vehicle sales were up 2.7%, sales of nondefense aircrafts were down 55.5%. There was also a decline in the categories of primary metals, machinery, and computers and electronics. Meanwhile, there were gains in fabricated metals and electrical equipment.

S&P Case-Shiller HPI – Home prices across the 20-city survey declined 0.2% month to month in November. However, on a seasonally adjusted basis, prices are up 0.7% and 4.3% year to year.

New Home Sales – New home sales were up 11.6% for an annual pace of 481,000. The median home price also rose 2.2% to $298,100, a year-over-year increase of 8.2%. Meanwhile, 219,000 homes were on sale in December and market supply is 5.5 months.

Consumer Confidence – Consumer confidence was up 10.3 points this month to 102.9. This is the best reading of the economic recovery. There was a 12.7-point jump in the present situation commandment to 112.6, largely on the strength of a component that measures how hard jobs are to get. Expectations are also up 7.9 points to 96.4, based on inflation expectations being lower because of lower gas prices.

MBA Purchase Applications – Total applications were 3.2% lower this week. A slight uptick in rates is partly to blame for refinancing applications falling 5.1% from the previous week. Meanwhile, purchases were down 0.1%.

Jobless Claims – Initial claims plunged 43,000 this week to 265,000, the lowest level since April 2000. The four-week rolling average fell by 8,250 to 298,500. Continuing claims fell by 71,000 jobs to 2.385 million. The four-week average came in at 2.439 million.

Pending Home Sales Index – Pending home sales fell 3.7% in December to a level of 100.7. There were single-digit declines across all regions of the country.

GDP – Fourth-quarter GDP rose 2.6%, coming in below the 3.2% analyst consensus estimate. Final sales of domestic product slowed to 1.8% growth. Sales to domestic purchasers were up 2.8%. The real GDP strength came from personal consumption expenditures, private inventory investment, exports, and state and local government spending. Contributing to a slowing of the growth was an increase in imports, lower federal spending and slower growth in nonresidential fixed investment.

Consumer Sentiment – January saw consumer sentiment finish at 98.1. This is up 4.8% from the end of December. Current conditions gained a point over the midmonth reading. Expectations dropped by 0.6 to 91.0. Five-year inflation expectations remain at 2.8%.

Mortgage News

There was a slight increase in mortgage rates this week.

30-year fixed-rate mortgages (FRMs) averaged 3.66% with an average 0.6 point for the week ending January 29, 2015, up from last week when they averaged 3.63%. A year ago at this time, 30-year FRMs averaged 4.32%.

15-year FRMs this week averaged 2.98% with an average 0.5 point, up from last week when they averaged 2.93%. A year ago at this time, 15-year FRMs averaged 3.40%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.86% this week with an average 0.4 point, up from last week when they averaged 2.83%. A year ago, 5-year ARMs averaged 3.12%.

1-year Treasury-indexed ARMs averaged 2.38% this week with an average 0.4 point, up from last week when they averaged 2.37%. At this time last year, the 1-year ARMs averaged 2.55%.

Equity Markets

The Dow Jones Industrial Average fell 251.90 points Friday to close at 17,164.95, falling nearly 3% for the week. The S&P 500 lost 26.26 points to finish at 1,994.99, down 2.8% week to week. The NASDAQ dropped 48.17 points Friday, finishing at 4,635.24, a 2.6% weekly decline.

The Week Ahead

Monday, February 2

Personal Income and Outlays (8:30 a.m. ET): This measures all possible income sources as well as expenditures of the public.

ISM Manufacturing Index (10:00 a.m. ET): This index measures the general direction of manufacturing within the U.S. The qualitative survey of purchasing managers looks at production, new orders, order backlogs, inventories and supplier deliveries, among other factors.

Wednesday, February 4

MBA Purchase Applications (7:00 a.m. ET) – The purchase applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.

Thursday, February 5

International Trade (8:30 a.m. ET) – International trade is composed of merchandise (tangible goods) and services. It’s available by export, import and trade balance for six principal end-use commodity categories and for more than 100 principal Standard International Trade Classification system commodity groupings.

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 smooths out weekly volatility.

Friday, February 6

Employment Situation (8:30 a.m. ET) – The employment situation report measures unemployment in the labor force as well as the sentiments of workers about the job market.

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

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