It seems clear that we are in the summer trading season in which stock trading volume has been lighter than normal. Combine that with the lack of market moving economic data this week, and combine it with coming off the July 4th holiday weekend, there has been little to talk about. Even the release of the FOMC minutes on Wednesday did little to impact the markets.
There was a time when investors hoped and prayed that the Fed would stop curtailing their stimulus program. Even though it was expected, the markets reacted negatively to the speculation as to what would happen when the Fed gets out of the bond and mortgage-backed securities purchasing program it has been in since the recession. Well... we are about to find out.
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The Fed released the minutes from their June meeting targeted end of their purchasing program is in October. Surprisingly investors reacted positively to it and the market actually increased slightly. Investors have accepted the fact that the program is going to end and they seem to be just going about their daily business and not getting caught up in "what if" scenarios.
Mortgage rates continue to remain very low and the economy continues to recover. Inflation is not an issue at the present time either. These facts have investors believing in the future of the economy and they are no longer talking doom and gloom that the stimulus program is going to come to an end.
Surprisingly for a holiday week, mortgage applications for purchases increased. The Mortgage Bankers Association reported that applications for purchase loans jumped 4.0 percent.
This is a larger increase than we have seen in a while. Applications are still off by more than 17 percent from the same time last year however any increase, especially in the summer months and a holiday week, is surely welcome. Refinance applications were virtually unchanged.
First time jobless claims remain steady at levels that are considered favorable for the employment sector. For the week ending July 5th claims were reported at 304,000. This is on the lower end of claims reports for the year. The holiday week may play a role in the number and we will have to wait and see what happens over the next couple of weeks.
Finally, we are heading into corporate earnings season. The quarter ended on June 30thand companies are beginning to release their 2nd quarter sales and profit reports. Thus far there have been no real surprises which is why the stock market has been continuing to trade in a narrow range. Many reports are due out over the next two weeks.
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Next week's market moving reports are on the light side:
- Tuesday July 15th - Retail Sales
- Wednesday July 16th - MBA Applications, Producer Price Index and Industrial Production
- Thursday July 17th - First Time Jobless Claims, Housing Starts, and Philadelphia Fed Survey
- Friday July 18th - Consumer Sentiment
As your mortgage professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can.