MARKET COMMENT
Mortgage bond prices finished the week within a narrow range that kept rates near unchanged despite more volatile trading. Rates found support Tuesday morning despite solid data. Housing starts were 1269K. Analyst looked for a reading of 1240K. However, reports that the European Central Bank will increase stimulus spending countered the data and resulted in some flight to safety buying of US debt instruments. The Fed left rates unchanged. “The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective as the most likely outcomes, but uncertainties about this outlook have increased.” Weekly jobless claims were lower than expected while the Philadelphia Fed report showed weakness. Mortgage interest rates finished the week near unchanged to better by approximately 1/8 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Consumer Confidence | Tuesday, June 25, 10:00 am, et | 134 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| New Home Sales | Tuesday, June 25, 10:00 am, et | 674K | Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. |
| Durable Goods Orders | Wednesday, June 26, 10:00 am, et | Down 2.2% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| Weekly Jobless Claims | Thursday, June 27, 8:30 am, et | 215K | Important. An indication of employment. Higher claims may result in lower rates. |
| Q1 GDP | Thursday, June 27, 8:30 am, et | Up 3% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Personal Income and Outlays | Friday, June 28, 8:30 am, et | Up 0.3%, Up 0.2% | Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Friday, June 28, 8:30 am, et | Up 0.2% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| U of Michigan Consumer Sentiment | Friday, June 28, 10:00 am, et | 97 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
Gross Domestic Product
The U.S. Department of Commerce’s Bureau of Economic Analysis releases the Gross Domestic Product (GDP) report each quarter. GDP is one the most important reports during any given quarter. The initial report is often based on incomplete data. Therefore, additional revisions are released over the following two months.
GDP is a measure of US economic output and spending. The report is significant in that it provides investors, analysts, traders, and economists with a comprehensive report of the direction of the economy. In addition, it also influences the decisions of Federal Reserve policy makers, Congressional budget employees, and corporate financial planners. GDP is the total of goods and services produced by the United States.
The GDP release can swing the financial markets in the short term. Be cautious heading into the GDP release in the event the data comes in against us.
