Week Marked by Volatility It was a volatile week in the financial markets and wild swings in stock prices caused equally wild swings in MBS prices and mortgage rates. The net result was favorable for mortgage rates, which ended the week marginally lower once again, and they now stand at their lowest level since June 2013. Concern about economic weakness in Europe, China, and other markets around the world has been the primary driver of the recent volatility. Investors fear that the weakness overseas will ultimately slow economic growth in the US. The Retail Sales report released this week may have been an indication that the concern is justified. After several months of steady improvement, Retail Sales in September declined. With investors expecting an increase of .3%, Retail Sales ex-auto actually fell .2% from August. Adding to the concerns and uncertainty about the pace of economic activity is the Ebola scare. Even though the number of reported cases in the US is miniscule, the impact on the economy could be significant if the fear of contracting the virus alters the travel and buying habits of the general public. It has already affected airline stocks, which saw their prices plunge this week.
Posted on: Fri, 17 Oct 2014 17:14:20 +0000
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