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GDP Strong in 4th Quarter – Market Update - Quicken Loans Zing Blog

I hope everyone had a good holiday if you were celebrating! My family was in town, so it was a good weekend. Detroit is abuzz because a local legend is coming back to be the general manager of the Red Wings. It’s early, but hope springs anew that Hockeytown might soon be restored to its former glory.

We’ll have to see if retail sales numbers for April received a bump because of increased activity from our season ticket purchases. It’s a stretch, but I’ve got to do something to spice up the beginning of these articles. Let’s jump into the headlines.

Headline News

Industrial Production

Industrial production numbers fell by 0.1% in March and manufacturing was flat. Meanwhile, capacity utilization in factories fell 0.2% to 78.8%. However, utilization numbers for February were upwardly revised by 0.8% to 79%.

Business equipment was up 0.4% and has risen 3.8% on the year. Businesses are ordering more machinery in order to ramp up production. However, production of consumer goods was down 0.2% and has fallen 0.1% on the year. Meanwhile, manufacturing volumes overall are only up to 1% on the year versus 2.8% for overall industrial production.

Vehicle production also dropped 2.5% on the month and has fallen 4.5% on the year. Meanwhile, growth in the high-tech sector was up 0.2% monthly and 3.5% on the year.

Production in utilities was up 0.2% in March, while mining production fell 0.8%. Despite this, production in the sector is still up 10.5% yearly.

Housing Market Index

In numbers for April, home builder sentiment went up one point to 63, matching expectations. The index has been slowly climbing back from a downturn at the end of the year and recent lower mortgage rates have helped.

Current cells are up a single point to 69, while the outlook for future sales over the next 6 months was down a point at 71. Finally helping the numbers was a three-point increase in the amount of traffic going through new homes at 47. However, this remains a week number.

On a regional basis, the West is in front at 69. Meanwhile, the South is close on its heels at 67. The Midwest and Northeast are a ways off at 53 and 51, respectively.

MBA Mortgage Applications

With interest rates ticking back up slightly, refinance applications were down 8%, and overall applications fell 3.5% despite a 1% uptick in purchase applications.

The average rate for a 30-year fixed conforming mortgage was up four basis points to 4.44%.

International Trade

The U.S. trade deficit decreased by $1.7 billion in February to come in at $49.4 billion. Exports were up 1.1% while imports rose just 0.2%.

Exports of goods were up 1.5% to $139.5 billion. Orders of civilian aircraft were up by $2.2 billion. While that was the big driver, there was also a $600 million increase in exports of monetary gold, and consumer goods exports of food and other farm-based products were down 200 million. However, exports of services were up 0.3% at $70.1 billion.

On the import side, these settled at $259.1 billion overall. Consumer goods imports were up $1.6 billion, and industrial supplies were down $1.2 billion, even accounting for an $800 million rise in oil imports.

Jobless Claims

Initial jobless claims were down 5,000 to come in at 192,000 overall. This brought the 4-week moving average down to 201,250, a decrease of 6,000 on the week.

Meanwhile, on the continuing claims end, these were down 63,000 to 1.653 million. Meanwhile, the 4-week average was down 22,750 to about 1.713 million.

Retail Sales

Retail sales for March were up 1.6%, which was well above analyst expectations. While this is a good thing, gains have also been uneven. The report points out that sales were down 1.6% in December.

Taking out cars and trucks, sales were still up 1.2%. When further removing gas, these were up 0.9%. Finally, sales in the control group were up 1%.

Vehicle sales were up 3.3% in March, while gas station sales were up 3.5% as the cost of fuel rose. Restaurant sales were also up 0.8% and have notched three consecutive monthly gains along with furniture and home stores, up 1.7% in March.

General merchandise sales were up 0.7%, but department store sales were flat and overall merchandise purchases have shown weakness lately.

Housing Starts

Starts were at their weakest points since May 2017, being down 3,000 to 1.139 million on a seasonally adjusted annual basis. However, the changes were worse than that because starts from the month of February were also revised down by 20,000. Starts are down a total of 14.2% on the year.

On the permits side, single-family permits were down 1.1% in March and 5.1% on the year, with the overall permits settling at 1.269 million on an annual basis. Single-family permits were down 5.1% on the year with overall building permits falling 7.8%.

The lone piece of good news is that completions were up 11.9% to 938,000 on the single-family side.

Mortgage Rates

Fixed rates were up a bit last week after several weeks of going lower. Still, if you happen to be in the market to purchase or refinance, they’re still lower than they were last year at this time, so it could be advantageous to lock your rate now.

The average rate for a 30-year-fixed mortgage with 0.5 points paid in fees was up five basis points to 4.17% last week. This is down from 4.47% a year ago.

Meanwhile, on the shorter end of things, the average rate for a 15-year fixed mortgage with 0.5 point was up a couple of basis points to 3.62%. This is down from 3.94% last year.

Finally, the average rate for a 5-year treasury-indexed, hybrid adjustable rate mortgage (ARM) was down two basis points to settle at 3.78% with 0.3 points paid. This is up from 3.67% at the same time in 2018.

Stock Market

Image search and sharing platform Pinterest had its first day on the public stock exchange Friday along with videoconferencing company Zoom. Pinterest shares were up 28% from the offering price to finish the day at $24.40. Meanwhile, shares in Zoom were up 72% to close at $62. These were just a harbinger of a good day for the market in general.

The Dow Jones Industrial Average was up 110 points on the day to close at 26,559.54 up 0.56% on the week. The S&P 500 finished the week down 0.08% after closing at 2,905.03. It was up 4.58 points on the day. Finally, the Nasdaq was up 0.17% on a weekly basis after finishing the day up 1.98 points to close at 7,998.06.

The Week Ahead

Monday, April 22

Existing Home Sales (10:00 a.m. ET) – Existing Home Sales tallies the number of previously constructed homes, condominiums and co-ops that were sold during the month. Existing homes (also known as “home resales”) account for a larger share of the market than new homes and indicate housing market trends.

Tuesday, April 23

FHFA House Price Index (9:00 a.m. ET) – The Federal Housing Finance Agency (FHFA) House Price Index (HPI) covers single-family housing using data provided by Fannie Mae and Freddie Mac. The HPI is derived from transactions involving conforming conventional mortgages purchased or securitized by Fannie Mae or Freddie Mac.

New Home Sales (10:00 a.m. ET) – This report measures the number of newly constructed homes with a committed sale during the month. This will be the report for January.

Wednesday, April 24

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 25

Durable Goods Orders (8:30 a.m. ET) – These are based on new orders placed with domestic manufacturers for factory goods.

Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals filing for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The 4-week moving average of new claims smooths out weekly volatility.

Friday, April 26

Gross Domestic Product (GDP) (8:30 a.m. ET) – This release measures the monetary value of all final goods and services produced within the U.S. This report is released on a quarterly basis.

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.

We get both new and existing home sales as well as a look at the overall economy with GDP next week. It’s going to be busy and we’ll have it all covered in Market Update.

Mortgage rates and economic data certainly aren’t everyone’s thing. If you’ve got a craving for something a little less dry, we’ve got plenty of home, money and lifestyle content to share with you if you subscribe to the Zing Blog below. Today is Earth Day, but practical tips on how to conserve and be more mindful of resources are helpful year-round. Here are seven ways to celebrate Earth Day every day. Have a great week!

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