Market Update - Quicken Loans Zing Blog

This week is absolutely loaded with economic reports. We get everything from international trade to home prices to the very important Friday employment report.

Headline News

International Trade in Goods: The trade deficit increased $500 million to $62.9 billion in February. Exports were up 2.0%, but imports were up 1.6%. There was a 1.4% decline in industrial supplies. Imports of consumer goods were up 6.9%. Also on the rise were imports of capital goods. The import rise in capital goods was partially offset by a rise in exports in the same category.

Personal Income and Outlays: Personal incomes were up 0.2% for February. This is despite wages and salaries being down 0.1%. Meanwhile, prices were down 0.1%. However, prices in core categories were up 0.1%. Overall, prices were up 1.0% on the year. Core prices were up 1.7% annually. In a slight negative, the savings rate went up one-tenth of a point to 5.4%.

Pending Home Sales: Pending sales were up 3.5% in February, following an 11.4% rise in the Midwest. The numbers were also higher in the South and West as the index is at an overall level of 109.1.

S&P Case-Shiller HPI: Prices were flat overall for the month of January, but they’re up 0.8% on a seasonally adjusted basis. Prices are up 5.7% overall on the year. Seattle and Portland saw 1.5% gains this month. Meanwhile, San Diego and Los Angeles were up 1.1% and 1.0%, respectively. The strongest home price appreciations this year have occurred in Portland at 11.8%, Seattle at 10.8% and San Francisco at 10.5%. Washington, DC and New York are the caboose on this train at 2.1% and 2.8% annual growth.

Consumer Confidence: Consumer confidence was up 2.2 points in March to 96.2 points. In addition, February numbers were revised up and 1.8 points to 94.0. One negative in the data is the fact that more Americans think jobs are hard to get. It’s up 3.0% to 26.6%. However, the number of Americans thinking jobs are plentiful is up 2.6% to 25.4%. Your guess is as good as mine. More Americans see more jobs opening up, while fewer Americans see less jobs opening up. That’s good. As far as buying plans, America plans on buying more appliances while housing is flat. Cars are down a bit. Inflation expectations are at 4.7%.

MBA Mortgage Applications: Mortgage applications were down 1.0% last week as refinances fell 3.0%, a gap that couldn’t be made up by a 2.0% increase in purchases. The average rate for a 30-year conforming mortgage was up one basis point to 3.94%.

Jobless Claims: Initial claims were up 11,000 last week. They still remain at a very low 276,000. The four-week average was up 3,500 to come in at 263,250. Continuing claims were down 7,000 at 2.173 million. The four-week average is down 14,000 at 2.191 million.

Employment Situation: Nonfarm payrolls were up 215,000 in March. This beat expectations for 210,000 jobs added. In a bit of a negative, the unemployment rate was up to 5.0% from 4.9% in February. Average hourly earnings were up 0.3% and the average workweek held steady at 34 hours, 24 minutes. The labor force participation rate picked up 0.1% to 63.0%. Of the added jobs, 195,000 of them were added to private payrolls with the government taking in 20,000 jobs. There were big gains in trade and transportation, professional and business services, construction and retail. However, jobs were cut in the manufacturing sector.

ISM Manufacturing Index: The manufacturing index was up 1.3 points in March to 51.8 thanks to a dramatic increase in new orders. Orders were up 7.0 points to 58.3. There’s also strength in the latest reading for both production and backlogs. New exports are up 5.5 points to 52.0.

Consumer Sentiment: The consumer sentiment index settled at 91.0 in the final reading in March, a full point above its mid-month reading. Expectations came in at 81.5. Current conditions finish the month at 105.6. Five-year inflation expectations are up 0.2% to match one-year expectations, which are unchanged at 2.7%.

Mortgage News

Mortgage rates were either flat or very slightly higher last week.

30-year fixed-rate mortgages (FRMs) averaged 3.71% with an average 0.5 point for the week ending March 31, 2016, unchanged from last week. A year ago at this time, 30-year FRMs averaged 3.70%.

15-year FRMs this week averaged 2.98% with an average 0.4 point, up from last week when they averaged 2.96%. A year ago at this time, 15-year FRMs averaged 2.98%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.90% this week with an average 0.5 point, up from last week when they averaged 2.89%. A year ago, 5-year ARMs averaged 2.92%.

Stock Market

It was a Friday where Americans could have their cake and eat it, too. All three major stock indexes were up while the price of oil fell $1.55 to $36.79 per barrel in the futures market.

The Dow Jones Industrial Average rose 107.66 points to 17,792.75, gaining 1.58% for the week. The S&P 500 finished the day at 2,072.78, up 13.04 points. This was a weekly improvement of 1.81%. Meanwhile, the NASDAQ was up 44.69 points to finish Friday at 4,914.54. The NASDAQ was up 2.95% for the week, helped by a 4.1% gain in Apple stock that probably has something to do with the iPhone bump caused by the release of the newest model.

The Week Ahead

Tuesday, April 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.

Wednesday, April 6

MBA Mortgage Applications (7:00 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.

Thursday, April 7

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.

There’s not too much going on next week outside of international trade numbers, but don’t despair. We have plenty of home, money and life content ready to fill the void if you subscribe to the Quicken Loans Zing Blog below.

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