Market Update - Quicken Loans Zing Blog

There were several major economic reports last week, but none had a bigger effect than a really strong jobs report that hit on Friday and gave the stock market renewed confidence.

Headline News

ISM Manufacturing Index: Manufacturing outlooks fell slightly in July as the index was down 0.6 points to 52.6. Manufacturing is still growing, but the lower number means it’s a little slower. Employment was down a little bit and delivery delays decreased. This can be bad news for employment because delivery delays can cause more hiring to cut down on the backlog. New orders are still at a very solid 56.9 and export orders are still growing, though not as quickly as domestic orders.

Personal Income and Outlays: Incomes were up 0.2%, but consumers spent even faster as that metric rose 0.4% in June. The savings rate was down 0.2% as a result and consumers are saving 5.3% of their income. Prices were up 0.1% both overall and in core categories. Overall inflation is at 0.9% on the year, but in key categories inflation has risen 1.6%. The core inflation metric excludes gasoline and food, two areas that tend to fluctuate quite a bit.

MBA Mortgage Applications: Despite the average rate on a 30-year fixed mortgage falling two basis points to 3.67%, the composite index was down 3.5%. Refinances were down 4.0% and purchases fell 2.0%.

Jobless Claims: Initial claims were a bit higher, raising 3,000 to 269,000. Despite still being very low, the increase was enough to bump the four-week average up by 3,750 to 260,250. On the continuing claims side, they’re down 6,000 at 2.138 million. The four-week average is up 5,000 to 2.142 million.

Employment Situation: Nonfarm payrolls were very strong, up 255,000 in July. The unemployment rate remained at 4.9%. Of those jobs, 217,000 came from private payrolls and 38,000 were government jobs. Labor force participation was up 0.1% to 62.8%. Average hourly earnings were up 0.3% and the average work week increased by six minutes to 34.5 hours. Digging deeper into the numbers, professional and business services was up 70,000 in July. Constriction was up 14,000, with retail rising 15,000 and financial activities up 18,000.

International Trade: The trade gap was up and $3.5 billion in June to $44.5 billion. However, this is a good sign for demand. Imports were up 1.9%, especially in the areas of capital goods and consumer goods. The downside is that export gains were comparatively small, up 0.3%.

Mortgage News

Mortgage rates dropped back to near this year’s lows. Any way you slice it, it’s a great time to purchase or refinance.

30-year fixed-rate mortgages (FRMs) averaged 3.43% with an average 0.5 point for the week ending August 4, 2016, down from last week when they averaged 3.48%. A year ago at this time, 30-year FRMs averaged 3.91%.

15-year FRMs this week averaged 2.74% with an average 0.5 point, down from last week when they averaged 2.78%. A year ago at this time, 15-year FRMs averaged 3.13%.

5-year Treasury-indexed hybrid adjustable rate mortgages (ARMs) averaged 2.73% this week with an average 0.5 point, down from last week when they averaged 2.78%. A year ago, 5-year ARMs averaged 2.94%.

Stock Market

A really strong jobs report helped lift the S&P 500 and NASDAQ to new all-time highs and possibly showed that May’s week report was an outlier.

The Dow Jones Industrial Average was up 191.48 points Friday to close at 18,543.53. This was up 0.60% for the week. Meanwhile, the S&P 500 finished the day at 2,182.87, up 0.43% for the week and rising 18.62 points for the day. The NASDAQ finished at 5,221.12 to close the week up 1.14% after gaining 54.87 points on the day.

The Week Ahead

Tuesday, August 9

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 that compares what people think their homes are worth with the opinions of appraisers. 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, both on the national and regional level. 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, August 10

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.

Thursday, August 11

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 four-week moving average of new claims smooths out weekly volatility.

Friday, August 12

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.

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 service stores. Data is collected from the Monthly Retail Trade Survey conducted by the U.S. Census Bureau.

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 are a few mid-level reports coming out this week. If economics and mortgages don’t get you excited, we have plenty of home, money and lifestyle content to keep you going all week long.

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