Weekly Market Commentary: Mortgage bond prices finished the week higher which pushed rates lower. There was some flight to quality buying of mortgage bonds the beginning of the week tied to euro zone economic concerns. Portugal’s largest bank needed a multi-billion euro bailout. Stronger than expected factory orders data erased some of those early gains Tuesday morning. Weekly jobless claims came in at 289k versus the expected 308k. Continuing claims were 2518k compared to the expected 2530k. The Federal Reserve issued a first time Report on the Economic Well-Being of U.S. Households Thursday which indicated “many households were faring well, but that sizable fractions of the population were at the same time displaying signs of financial stress.” Mortgage interest rates fell by about 3/8 of a discount point for the trading week. Business Inventories The report on business inventories basically gives a broader look at the durable goods, factory orders, and retail sales reports. Not only is this report an important part of the investment component of the GDP, but it also provides additional evidence about the economy in the upcoming months. Changes in business inventories slow as the economy approaches a peak, and rise as the economy approaches the trough of a recession. Therefore the change in business inventories is a leading indicator of GDP. The data for this report, which are published by the Department of Commerce’s Census Bureau, comes from a monthly survey of inventories, orders, and manufacturers’ shipments, in addition to the merchant wholesalers and retail trade surveys. In this environment every piece of data has the potential to cause some volatility.
Posted on: Fri, 08 Aug 2014 19:30:26 +0000
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