Market Update

I went to my little sister’s high school graduation this weekend. Seeing all those young faces with hope for the future leaves you feeling pretty good.

The stock market had its own week of good feeling, which was good because it really drove the news. Let’s jump right in.

Headline News

MBA Mortgage Applications

Mortgage applications were up 4.1% from the week prior. They actually fell 7.0%, but there was an adjustment for the Memorial Day holiday.

Both the refinance index and the purchase applications index were up 4.0% on the week. Meanwhile, purchase applications made up 64.7% of total applications as the average interest rate on a 30-year conforming mortgage decreased 9 basis points to 4.75%.

International Trade

International trade numbers are looking up, as the U.S. trade deficit was the lowest it’s been in seven months in April, falling 2.1% to $46.2 billion. In addition, the March deficit was revised down to $47.2 billion from initial estimates of $49.0 billion.

It’s important to note that the deficit is higher when adjusted for inflation at $77.5 billion.

Exports were up 0.3% to $211.2 billion. A big reason for this was a $1.3 billion increase in demand for industrial supplies like fuel oil and petroleum. These were the highest industrial supplies and materials exports had ever been. Soybean exports were up around $300 million, as were corn shipments. Commercial aircraft exports were down $2.8 billion.

Americans also imported less, with this number falling 0.2% to $257.4 billion. This included a $2.8 billion drop in consumer goods imports as well as a $2.2 billion downturn in cell phone imports and other household items. Meanwhile, imports of cars and trucks were down $1.0 billion.

Imports of crude oil did rise $1.0 billion in April.

Jobless Claims

Initial claims were down 1,000 last week to 222,000. The four-week average did move up 2,750 to come in at 225,500. Claims tracking is still an issue in Puerto Rico and the Virgin Islands.

On the continuing claims side, these did pop up 21,000 to come in at 1.741 million. However, the four-week average was down to about 1.729 million, after falling 13,250 on the week.

Mortgage Rates

Mortgage rates were down for the second consecutive week. If you’re trying to decide whether it’s a good time to lock your interest rate, it should be noted that this coming week, the Federal Reserve will have a vote where they’re widely expected to raise short-term interest rates. Although not directly correlated, this has an effect on longer-term rates like mortgages.

The upward change has been pretty well telegraphed, and mortgage bond traders have priced the hike into rates currently. However, if the Fed says something in its statement that hasn’t been anticipated, this could cause rates to jump around a bit. If you see a rate you like prior to Wednesday at 2:00 p.m., you might as well go ahead and lock it.

The average rate on a 30-year fixed mortgage was down two basis points to 4.54% with 0.5 points in fees last week. At this time last year, the rate was 3.89%.

Looking at shorter terms, the average rate on a 15-year fixed mortgage was 4.01% with 0.4 points, down five basis points on the week and up from 3.16% a year ago.

Finally, 5-year treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 3.74% with 0.4 points, down six basis points on the week and up from 3.11% last year.

Stock Market

It was a good week on the stock market. If you’re in our Fantasy Stock League, it was likely a pretty good week for you, as the markets were up overall.

My portfolio took a bit of a hit when it was reported that fewer new iPhone models were being ordered based on supply chain analysis. I won’t overreact because speculation like this has been wrong before. But if this were real money, my week could have been better. Get in and see how you do.

Stocks rose Friday, despite investor concerns over a trade war. It’ll be interesting to see how this plays out.

The Dow Jones industrial average closed at 25,316.53, up 75.12 points on the day and 2.77% on the week. The S&P 500 was up 8.66 points overall to finish at 2,779.03, up 1.62% weekly. Finally, the Nasdaq was up 1.21% week to week. It finished up 10.44 points to close at 7,645.51.

The Week Ahead

Tuesday, June 12

Consumer Price Index (CPI) (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.

Quicken Loans Home Price Perception Index (HPPI) (10:00 a.m. ET) – Quicken Loans, the nation’s second-largest retail mortgage lender, releases data every month comparing what people think their homes are worth to appraisals. Similar opinions of value often make for smoother purchase and refinance transactions.

Quicken Loans Home Value Index (HVI) (10:00 a.m. ET) – Quicken Loans also releases data on home values, at both the national and regional levels. Homeowners can gain a perception of whether values are increasing or decreasing and get a better idea of where they stand in terms of equity.

Wednesday, June 13

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.

Producer Price Index (PPI) (8:30 a.m. ET) – The Producer Price Index measures the average change over time in prices received by domestic producers for the sale of goods and services.

Thursday, June 14

Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to report the number of individuals filing 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.

Retail Sales (8:30 a.m. ET) – Retail sales measure total receipts from stores selling merchandise and related services to final consumers. Sales are measured by retail and food service stores. Data is collected from the Monthly Retail Trade Survey conducted by the U.S. Census Bureau.

Friday, June 15

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.

There’s plenty of important economic data and a Federal Reserve rate decision coming up this week. We’ll have it all covered for you in next week’s Market Update.

We understand that mortgage rates and economic data don’t float everyone’s boat. The good news is we have plenty of home, money and lifestyle content for your reading pleasure if you subscribe to the Zing Blog below. Don’t forget. Father’s Day is coming up this week. If you’re not sure what to get yet, we’ve got a gift guide for you to check out. Hopefully you find something you like for your #1 dad. Have a great week!

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