Durable Goods Orders: New orders for durable goods were up 3.4% in June. The higher-than-expected number was helped by a surge in civilian aircraft orders, up 103% from May. Still, orders were up 0.9%, excluding transportation. There were also gains in motor vehicle orders, computers and electronics, and big gains in machinery and fabricated metals. Electrical equipment was also up 2.8% in the period. Shipments were 0.1% higher as well.
S&P Case-Shiller HPI: Home prices showed surprising weakness in May, down 0.2% on a seasonally adjusted basis. This included declines in 12 of the 20 cities surveyed. Despite this, prices were actually up 1.1% month to month after taking out seasonal adjustment factors. Prices are flat year on year.
Consumer Confidence: Consumer confidence fell nearly nine points in July, coming in at 90.9. Expectations were down almost 13 points to 79.9. Much of this weakness has to do with the fact that 20% of Americans see fewer jobs becoming available six months from now. Meanwhile, the present situation component is down about three points to 107.4. Although still low, 26.7% of Americans believe jobs are hard to get, a figure that’s slightly higher than last month. There was also a drop in those with plans to buy cars. Inflation expectations are holding at 5.1%.
MBA Mortgage Applications: Applications were up 0.8% last week. A 0.1% decline in purchase applications was more than made up for by a 2.0% increase in refinance applications. The average rate for a 30-year-fixed mortgage moved down six basis points to 4.17%.
Pending Home Sales: Pending home sales were down a steep 1.8% in June to 110.3. Year on year, pending sales are up 8.2%. Much of the decline is based around the South and Midwest. These regions are only up 7.8% and 5.0% respectively for the year. There were small monthly gains in the West and Northeast.
GDP: GDP was up 2.3% in the second quarter, putting it at the low end of estimates. A true positive was that revisions in GDP numbers for the first quarter put estimates at 0.6%, the first time this number has been on the plus side of the ledger. Final sales were up 2.4%. Meanwhile, residential investment was up 6.6% and personal consumption was up 2.9% on the strength of car sales. Nonresidential investment fell 0.6%. So did government spending, down 1.1% on decreased spending for defense. Net exports were also up and prices increased 2.0%.
Jobless Claims: Initial claims were up 12,000 to 267,000 last week. The four-week average is down 3,750 to 274,750. Continuing claims were up 46,000 to 2.262 million. The four-week average is down 1,000 to 2.255 million.
Consumer Sentiment: Consumer sentiment is down 0.2 points to 93.1 in the final reading for July. Expectations were down to 84.1 from 87.8 last month with less certainty in the job market. The current conditions component was also down 1.7 points and there’s been a slight downturn in consumer activity. Inflation expectations are up 0.1% for the next year at 2.8%. This matches the 5-year outlook which is up 0.2%.
Rates were down across the board this week.
30-year fixed-rate mortgages (FRMs) averaged 3.98% with an average 0.6 point for the week ending July 30, 2015, down from last week when they averaged 4.04%. A year ago at this time, 30-year FRMs averaged 4.12%.
15-year FRMs this week averaged 3.17% with an average 0.6 point, down from last week when they averaged 3.21%. A year ago at this time, 15-year FRMs averaged 3.23%.
5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 2.95% this week with an average 0.4 point, down from last week when they averaged 2.97%. A year ago, 5-year ARMs averaged 3.01%.
1-year Treasury-indexed ARMs averaged 2.52% this week with an average 0.3 point, down from last week when they averaged 2.54%. At this time last year, 1-year ARMs averaged 2.38%.
The markets closed lower on Friday. Energy earnings were down and weaker than expected economic data bothered some investors.
The Dow Jones Industrial Average was down 56.12 points on Friday to close at 17,689.86, a gain of 0.69% for the week. Meanwhile, the S&P 500 finished up at 2,103.84, a 4.79 point loss. Despite this, the index gained 1.16% for the week. Finally, the NASDAQ lost half a point on Friday, closing at 5,128.28, a weekly gain of 0.78%.
The Week Ahead
Monday, August 3
Personal Income and Outlays (8:30 a.m.) – This measures all possible income sources as well as expenditures of the public.
ISM Manufacturing Index (10 a.m.) – 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, August 5
MBA Mortgage Applications (7 a.m. ET) – The mortgage applications index measures applications to mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
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.
Thursday, August 6
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, August 7
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.
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