![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week sharply higher which put significant downward pressure on rates. Rates worsened to start the week but bounced back Wednesday afternoon, Thursday, and Friday. The Federal Reserve cut rates 25 basis points as expected. The decision was unanimous. Fed Chair Powell signaled they will remain data dependent and emphasized that the current state of the economy is very neutral in relation to overheating vs slowing. The data was mixed. Factory orders were down 0.5% vs down 0.4%. The trade deficit was $84.4B vs $84.1B. Weekly jobless claims were 221K as expected. Productivity was 2.2% vs 2.3%. Consumer sentiment was 73 vs 71. Mortgage interest rates finished the week better by approximately 5/8 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
|---|---|---|---|
| Consumer Price Index | Wednesday, Nov. 13, 8:30 am, et | Up 0.2%, Core up 0.3% | Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates. |
| Producer Price Index | Thursday, Nov. 14, 8:30 am, et | Up 0.2%, Core up 0.3% | Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates. |
| Weekly Jobless Claims | Thursday, Nov. 14, 8:30 am, et | 222K | Important. An indication of employment. Higher claims may result in lower rates. |
| Fed Chair Speech | Thursday, Nov. 14, 3:00 pm, et | None | Important. When the Fed Chair speaks the financial markets listen. Volatility may surround the remarks. |
| Retail Sales | Friday, Nov. 15, 8:30 am, et | Up 0.4% | Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates. |
| Industrial Production | Friday, Nov. 15, 9:15 am, et | Down 0.4% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
| Capacity Utilization | Friday, Nov. 15, 9:15 am, et | 77.1% | Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates. |
| Business Inventories | Friday, Nov. 15, 10:00 am, et | Up 0.2% | Low importance. An indication of stored-up capacity. A significantly larger increase may lead to lower rates. |
Business Inventories
The report on business inventories 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. The data is a mid-tier release. However, in this environment every piece of data has the potential to cause volatility.
