Market Snapshot | Week of January 29th, 2018
January 29, 2018 | Darel Ansley
Inside Lending
 
 
 
 
  Darel Ansley Darel Ansley
Senior Real Estate Loan Officer
NMLS# 500247
901 North Mission Street
Wenatchee, WA 98801 Office: (509) 664-5324
Mobile: (509) 860-3301
Fax: (509) 664-5315
darel.ansley@peoplesbank-wa.com
www.peoplesbank-wa.com/darel
  Peoples Bank  
 
For the week of January 29, 2018 — Vol. 16, Issue 5
>> Market Update 
QUOTATION OF THE WEEK... "A lot of people ask me if I were shipwrecked, and could only have one book, what would it be? I always say 'How to Build a Boat.'" --Steven Wright, American comedian
INFO THAT HITS US WHERE WE LIVE... Just like Housing Starts the prior week, New Home Sales closed out 2017 at their highest annual total in a decade, 14.1% ahead of a year ago. They were down 9.3% in December, but the post-hurricanes boost is over. Read more.
Existing Home Sales ended the year in even better shape, posting their best totals since 2006.  They slipped 3.6% in December, but still finished 1.1% up from a year ago. Demand stays strong, but inventories are a concern in many markets.
The latest Mortgage Bankers Association Weekly Applications Survey reported the seasonally adjusted Purchase Index up 6%, to its highest level since April 2010.
BUSINESS TIP OF THE WEEK...  Always follow up. Respond promptly to emails, voice mails and online comments  from everyone--current, potential and past clients,  your community  and referral network.
>> Review of Last Week

WHAT? ANOTHER RECORD-BREAKING WEEK?... Yup! Investors pushed stocks to new record highs, as the Dow, S&P 500 and Nasdaq all bested 2% gains for the week, powered by companies' stronger-than-expected earnings reports, with 81% beating sales expectations!
The Q4 GDP-Advance estimate showed 2.6% economic growthlower-than-expected,  but a nice improvement over the 1.8% Q4 growth a year ago. Plus, consumer spending (about 70% of GDP) was up 3.8%, while business spending on equipment shot up 11.4%.
That investment in equipment was reflected in December's Durable Goods Orders, up an unexpected 2.9%, which economists said confirms an improving economy. Finally, both [www.dol.gov/ui/data.pdf]weekly initial jobless claims and continuing claims remain historically low.
The week ended with the Dow UP 2.1%, to 26617; the S&P 500 UP 2.2%, to 2873; and the Nasdaq UP 2.3%, to 7506.

Many bonds ended in negative territory, though the damage wasn't too bad to the 30YR FNMA 4.0% bond we watch, down just .02, to $103.56. F reddie Mac's latest Primary Mortgage Market Survey had national  average 30-year fixed mortgage rates up for the third week in a row,  but still below rates a year ago . R emember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?... Trulia's latest rental analysis says rents went up 3.1% overall in 2017, even as " the number of households renting has been declining while homeownership increased."
>> This Week's Forecast
EVERYTHING UP BUT THE FED RATE ... No change is expected with the FOMC Rate Decision. The Pending Home Sales index of contracts signed on existing homes is forecast up, foretelling higher sales a few months out. Jobs are key to housing, so predicted gains in Nonfarm  Payrolls and Hourly Earnings are welcome. The ISM Index and Chicago PMI may slip, but still show strong manufacturing growth.
>> The Week's Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Economic Calendar for the Week of Jan 29 - Feb 2
Date Time (ET) Release For Consensus Prior Impact
M
Jan 29
08:30
Personal Income Dec 0.4% 0.3% Moderate
M
Jan 29
08:30
Personal Spending Dec
0.5% 0.6% HIGH
M
Jan 29
08:30
Core PCE Prices Dec
0.2% 0.1% HIGH
Tu
Jan 30
10:00
Consumer Confidence Jan 124.0 122.1 Moderate
W
Jan 31
08:30
Employment Cost Index Q4 NA 0.7% HIGH
W
Jan 31
09:45 Chicago PMI Jan 61.0 67.6 HIGH
W
Jan 31
10:00
Pending Home Sales Dec
0.6% 0.2% Moderate
W
Jan 31
10:30 Crude Inventories 01/27
NA -1.1M Moderate
W
Jan 31
14:00 FOMC Rate Decision 01/31 1.25%- 1.50%
1.25%- 1.50% HIGH
Th
Feb 1
08:30
Initial Unemployment Claims
01/27
238K 233K Moderate
Th
Feb 1
08:30
Continuing Unemployment Claims
01/20
NA 1.937M Moderate
Th
Feb 1
08:30
Productivity - Prelim. Q4
1.0% 3.0% Moderate
Th
Feb 1
08:30
Unit Labor Costs - Prelim. Q4
1.0% -0.2% Moderate
Th
Feb 1
10:00
ISM Index Jan
58.5 59.7 HIGH
F
Feb 2
08:30
Average Workweek Dec
34.5 34.5 HIGH
F
Feb 2
08:30
Hourly Earnings Dec
0.3% 0.3% HIGH
F
Feb 2
08:30
Nonfarm Payrolls Dec
180K 148K HIGH
F
Feb 2
08:30
Unemployment Rate Dec
4.1% 4.1% HIGH
F
Feb 2
10:00
U. of Michigan Consumer Sentiment - Final Jan 95.0 94.4 Moderate

>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months... The probability for a rate hike at this Wednesday's Fed meeting remains very low. But the futures market sees a hike in March, but no move in May. Note: In the lower chart, a 4% probability of change is a 96% certainty the rate  will stay the same.
Current Fed Funds Rate: 1.25%-1.50%
After FOMC meeting on: Consensus
Jan 31
1.25%-1.50%
Mar 21
1.50%-1.75%
May 2 1.50%-1.75%
Probability of change from current policy:
After FOMC meeting on: Consensus
Jan 31
         4%
Mar 21
       80%
May 2        24%
Share

check_circle

You message has been sent!

Send us a Message: