International Trade: The trade gap widened this month, increasing the deficit by $1.2 billion to $41.9 billion. This was a smaller increase than the $2 billion predicted by analysts. Exports fell $1.5 billion to $188.6 billion. The dollar has shown Herculean strength compared to most international currency, so there’s a high price to import U.S. goods. Offsetting this a little bit was a $300 million decrease in imports to $230.5 billion. Meanwhile, we imported $1.2 billion more of goods last month at $61.5 billion. The surplus of exported services was slightly wider at $19.6 billion. Meanwhile, the petroleum gap was down $1.0 billion to $5.8 billion, the result of increased domestic production and more exports of refined products.
MBA Mortgage Applications: Mortgage applications jumped up last week following a couple of weeks of declines. Purchase applications were up 7.0% and refinances were up 3.0%. The 4.6% increase in overall applications no doubt had something to do with the fact that the rate for the average 30-year fixed mortgage was down three basis points to 4.23%.
Jobless Claims: Initial claims are up 15,000 this week to 297,000. Although this is quite a spike, jobs numbers for a holiday weeks are often volatile because they are difficult to adjust. The four-week average is up 4,500 to 279,500. Meanwhile, continuing claims were up 69,000 to 2.334 million, also a steep rise. The four-week average is up 15,000 to 2.268 million. There’s a chance that some of the increases in jobless claims are due to the rolling layoffs associated with auto plants shutting down to convert assembly lines for new vehicle models in July.
Mortgage rates were down again this week, bringing welcome pricing relief for people looking to get a new home loan. A report released by Black Knight Financial Services this week found that 6.5 million borrowers could save money by refinancing while rates remain this low.
30-year fixed-rate mortgages (FRMs) averaged 4.04% with an average 0.6 point for the week ending July 9, 2015, down from last week when they averaged 4.08%. A year ago at this time, 30-year FRMs averaged 4.15%.
15-year FRMs this week averaged 3.20% with an average 0.5 point, down from last week when they averaged 3.24%. A year ago at this time, 15-year FRMs averaged 3.24%.
5-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 2.93% this week with an average 0.4 point, down from last week when they averaged 2.99%. A year ago, 5-year ARMs averaged 2.99%.
1-year Treasury-indexed ARMs averaged 2.50% this week with an average 0.3 point, down from last week when they averaged 2.52%. At this time last year, 1-year ARMs averaged 2.40%.
There will be no big fat Greek divorce from the Euro as negotiators reached a deal early Monday morning to provide bailout funds and alleviate the country’s debt crisis. Back in the U.S., stock traders must’ve anticipated this on Friday because there were big gains, despite midweek technical glitches that shut down trading for several hours.
The Dow Jones Industrial Average was up 211.79 points Friday to close at 17,760.41, a 0.17% weekly gain. The S&P 500 was about dead even for the week after gaining 25.31 points Friday to close at 2,076.62. The NASDAQ was up 75.3 points to close at 4,997.70, a weekly loss of 0.23%
The Week Ahead
Tuesday, July 14
Retail Sales (8:30 a.m. ET) – Retail sales measure the total receipts at stores that sell merchandise and related services to final consumers. Sales are measured by retail and food services stores. Data is collected from the Monthly Retail Trade Survey conducted by the U.S. Census Bureau.
Quicken Loans HPPI/HVI (10 a.m. ET) – Quicken Loans, the second largest retail mortgage lender in the U.S., releases a monthly report on home values as well as the difference between homeowner perception of value versus appraiser opinion of value.
Wednesday, July 15
MBA Mortgage Applications (7 a.m. ET) – The mortgage applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
Producer Price Index (PPI) (8:30 a.m. ET) – The Producer Price Index measures the average change over time in the prices received by domestic producers of goods and services.
Industrial Production (9:15 a.m. ET) – The Federal Reserve’s monthly index of industrial production and the related capacity indexes and capacity utilization rates covers manufacturing, mining, and electric and gas utilities.
Thursday, July 16
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.
Housing Market Index (10 a.m. ET) – The National Association of Home Builders produces a housing market index based on a survey in which respondents from this organization are asked to rate the general economy and housing market conditions. The Housing Market Index is a weighted average of separate diffusion indexes, including present sales of new homes, sales of new homes expected in the next six months, and traffic of prospective buyers in new homes.
Friday, July 17
Consumer Price Index (8:30 a.m. ET) – The consumer price index measures changes based on the price of a fixed basket of goods and services purchased by consumers.
Housing Starts (8:30 a.m. ET) – A housing start is registered when the construction of a new residential building begins. The start of construction is defined as the beginning of excavation of the foundation for the building.
Consumer Sentiment (10 a.m. ET) – The University of Michigan’s Consumer Survey Center questions 500 households each month on their financial conditions and attitudes about the economy. Consumer sentiment is directly related to the strength of consumer spending.
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