Blog

The week that was:

• Oct retail sales were +1.4% overall and ex autos +0.2%. Retail sales are increasingly of interest to markets as we move into Christmas shopping ( the politically correct reference is Holiday shopping).
• NY Empire State manufacturing data; the overall index declined to 23.51 from 34.57 in October.
• Housing starts crumbled like a fresh saltine, down 10.6%, permits -4.6%.
• With mortgage rates well below 5.00% (with a fee) purchases were down and re-finances were lower according to the MBA data released on Wednesday.
• Mortgage prices and mortgage rates were literally unchanged this week.

Last week Bernanke's speech Monday to the NY Economics Club he reiterated he would keep rates low; essentially admitted he has little insight as to how the economic recovery will unfold and remarked "The best thing we can say about the labor market right now is that it may be getting worse more slowly." In layman speak, he isn't sure the unemployment situation is at its bottom.

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The week that was:

Not much in the way of economic measurements last week; it was a four day week for the bond and mortgage markets with Veteran's Day falling on Wednesday.

• Weekly MBA mortgage applications index was +3.2% from last week; it was all re-finances, its index up 11.3% while purchase applications dropped a huge 11.7% to its lowest level since Dec 2000. The refinance share of mortgage activity increased to 71.5% of total applications from 66.1% the previous week. The average interest rate for 30-year fixed-rate mortgages decreased to 4.90% from 4.97%, with points increasing to 1.03 from 1.01 (including the origination fee) for 80% LTV.
• Weekly jobless claims continued to decline last week, down another 12K for the previous week but still at 512K new unemployment claims filed.
• The Reuters/University of Michigan preliminary sentiment index decreased to a three-month low of 66 from 70.6 in October.
• A report from the Commerce Department showed the trade deficit widened in September by the most in a decade as rising demand for imported oil and automobiles swamped a fifth consecutive gain in exports.

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