![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week lower which put upward pressure on rates. Rates worsened almost every day. The data generally showed strength which fuels the Fed’s argument that more aggressive rate hikes may be needed. FHFA house prices rose 0.7% vs 0.3%. Consumer confidence was 109.7 vs 104. New home sales were 763K vs 675K. Durable goods orders rose 1.7% vs the expected 1% decline. GDP rose 2% vs 1.3%. Weekly jobless claims were 239K vs 266K. Income rose 0.4% as expected, Spending rose 0.1% vs 0.3%, and Core PCE Inflation rose 0.3% as expected. Consumer sentiment was 64.4 vs 63.9. Mortgage interest rates finished the week worse by approximately 5/8 of a discount point.
Looking Ahead
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| ISM Index | Monday, July 3, 10:00 am, et |
47.2 | Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates. |
| Factory Orders | Wednesday, July 5, 10:00 am, et |
Up 0.1% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Fed Minutes | Wednesday, July 5, 2:00 pm, et |
None | Important. Details of the last Fed meeting will be thoroughly analyzed. |
| ADP Employment | Thursday, July 6, 8:15 am, et |
180K | Important. An indication of employment. Weakness may bring lower rates. |
| Trade Data | Thursday, July 6, 8:30 am, et |
$69.8B deficit | Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates. |
| Weekly Jobless Claims | Thursday, July 6, 8:30 am, et |
280K | Important. An indication of employment. Higher claims may result in lower rates. |
| Employment | Friday, July 7, 8:30 am, et |
3.7%, Payrolls +200K |
Very important. An increase in unemployment or weakness in payrolls may bring lower rates. |
Factory Orders
Factory orders data is a monthly report released by the US Census Bureau. The release is officially referred to as The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories, and Orders. The manufacturing sector is a major component of the economy. Investors use the factory orders report to attempt to determine the direction of the economy in the future. Orders are generally believed to be a precursor to activity in the manufacturing sector because manufacturing typically has an order before considering an increase in production. Conversely, a decrease in orders eventually causes production to scale back; otherwise, the manufacturer accumulates inventories, which must be financed. Total factory orders break down to approximately 55% durable and 45% non-durable. Durable goods are items such as refrigerators, cars, and aircraft. Non-durables are items such as cigarettes, candy, and soap. Durable goods orders are typically reported a week earlier making a portion of the factory orders data “old news.” However, the orders report provides a more complete picture than the initial durable goods release. Revisions to initial data along with non-durable figures are factored in providing a more accurate look at the condition of the manufacturing sector.
