International Trade: The trade deficit increased by $6.5 billion to $48.3 billion. Cell phone imports account for $2.1 billion of that total, while there’s been a drop in exports. Why do I mention cell phone imports? It’s iPhone season, and not only do people buy millions upon millions of these things, but most of them are imported from China. Our trade gap with China increased by $3.4 billion in August. Ladies and gentlemen, the iPhone effect. Industrial supply exports fell $2.2 billion. Exports of consumer goods were down $600,000, cars dropped $500,000 and food and beverage exports fell $300 million. The overall goods gap came in at $67.9 billion. The petroleum gap was down $1.2 billion to $6.9 billion. In contrast to the goods gap, the services surplus keeps going up, climbing $100 million to $19.6 billion.
MBA Mortgage Applications: New regulations went into effect in the mortgage industry this past Saturday, and a bunch of lenders were trying to get applications set up before they went into effect. Combine that with a nine-basis-point drop in mortgage rates to an average of 3.99% on a 30-year fixed mortgage stemming from a low employment report, and you’ve got a lot of applications being put in. Applications were up 25.5% overall, with 27.0% coming from purchase and 24.0% being applications to refinance.
Jobless Claims: Initial claims were down 13,000 last week to 263,000. The four-week average was down 3,000, coming in at 267,500. Meanwhile, continuing claims were a mixed bag. Claims last week were up 9,000 to 2.204 million. The four-week average was down 14,000 to 2.222 million.
Fixed rates tumbled like a rock after the employment report came in lower than expected.
30-year fixed-rate mortgages (FRMs) averaged 3.76% with an average 0.6 point for the week ending October 8, 2015, down from last week when they averaged 3.85%. A year ago at this time, 30-year FRMs averaged 4.19%.
15-year FRMs this week averaged 2.99% with an average 0.6 point, down from last week when they averaged 3.07%. A year ago at this time, 15-year FRMs averaged 3.36%.
5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.88% this week with an average 0.4 point, down from 2.91% last week. A year ago, 5-year ARMs averaged 3.06%.
1-year Treasury-indexed ARMs averaged 2.55% this week with an average 0.2 point, up from 2.53% last week. At this time last year, 1-year ARMs averaged 2.42%.
Stocks had a good week. The Fed has given indications that it’s likely to hold off on the rate hike issue for at least a little while and the market has responded positively.
The Dow Jones Industrial Average ended the week up 3.72% after gaining 33.74 points on Friday to close at 17,084.49. The S&P 500 was up 1.4 points, coming in at 2,014.89. It was up 3.26% for the week. The NASDAQ was up 19.68 points and had a weekly gain of 2.61% as it closed at 4,830.47 on Friday.
The Week Ahead
Tuesday, October 12
Quicken Loans HPPI/HVI (10:00 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 and appraiser opinion of value.
Wednesday, October 14
MBA Mortgage Applications (7:00 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.
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.
Thursday, October 15
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.
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.
Friday, October 16
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.
Consumer Sentiment (10:00 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.
Visit the Quicken Loans Zing Blog for updated information on important economic releases that affect your wallet.
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