August 17th, 2022 - Market Update
Current position: Carefully floating
Stocks and Mortgage Bonds are both sharply lower to start the day.
Retail Sales were flat in the month of July, which is a little less than expectations of a 0.1% gain. They are up 10.3% year over year.
Core retail sales exceeded expectations with an 0.8% gain, which was 0.2% more than expected. Because of the increase in core sales, there may be an upside tweak to Q3 GDP forecasts.
The Atlanta Fed was last projecting 1.8% growth in Q3 yesterday, revised lower from 2.5% in the prior week. We will see how this impacts things next week.
CEO of ZipRecruiter, on CNBC in response to questions from Kelly Evans on the labor market. "After an extended record run in the labor market..in the back half of June, for the first time in more than a year, we saw a slowdown in the labor market, particularly amongst small and mid-sized businesses in a quarter in which you add 500k new jobs and you bring unemployment to 3.5%, it's not surprising to see the labor market take a breadth take a pause but that pattern has continued and it looks like it is the beginning of a slowdown in the overall labor market.”
The MBA released their Mortgage Application data for last week, showing that Purchases fell by 1% last week and are down 18% year over year. Interest rates moved slightly lower 5.47% to 5.45% and are 2.4% higher than this time last year.
Refinances increased by 5% last week and are down 82% year over year. Refinances made up 31% of all transactions.
Later this afternoon at 1:00pm ET there will be a 20-year Bond Auction, which can impact the markets, depending on the level of demand.
Additionally, at 2:00pm ET, the Fed Minutes from the July 27th Fed Meeting will be available. The Minutes will give us a closer look into the thought process of the Fed and may give some clues as to what the size of their hike will be at their next meeting, as well as their thoughts on inflation and balance sheet reduction, which ramps up to $95B next month.
Historically, days that the Fed minutes are released are negative for the Bond market, which is something we have to keep in mind.
Mortgage Bonds have broken to the downside from the Pennant they have been trading in for the last two months. There is a dual floor of support that Bonds are trying to hold on to, formed by the a Fibonacci level and 50-day Moving Average.
With Bonds testing the double floor, and market moving news this afternoon, we will begin the day carefully floating.
Source: MBS Highway
Join our Watchlist
Our Watchlist is a free service we offer to ensure you never miss an opportunity to lower your interest rate. There is no obligation associated with joining.
We’ll track rates and market conditions on your behalf, and reach out when we see an opportunity to save you money.
Questions?
Reach out any time. We’re here to help you find the best mortgage program for your unique conditions.
Contact us:
847-634-2252
info@longgrovemortgage.com
Or start an application.
