Comments Off on The Week In Review (November 13, 2007) : What To Watch For

The Week In Review (November 13, 2007) : What To Watch For

2007
11.13

The Dow Jones Industrial Average and NASDAQ shed 4.1% and 6.5%, respectively, last week.

Normally, this would be good news for mortgage rates because investors tend to look for “safe havens” in bond issues, but instead, just treasuries benefited last week. Mortgage bonds were left in the dust.

Mortgage rates finished to the upside after a week without hard data and one in which psychology and momentum ruled.

This week figures to be different.

Since the Fed’s decision to lower the Fed Funds Rate two weeks ago, there hasn’t been much hard data for market players to digest. This week, we’ll get an overdue look at how American consumers are dealing with inflationary pressures with the releases of October’s Retail Sales and CPI data.

Retail Sales hits the wires Wednesday morning and consumer spending represents two-thirds of the U.S. economy. Therefore, this very important data point will be closely watched because it could be foreshadowing how Americans will spend through the all-important Holiday Season.

If Retail Sales surprises to the strong side, mortgage rates may increase on worries over inflation. If Retail Sales surprises to the weak side, mortgage rates may increase on worries over recession. Either way, there’s no real room for error if you are floating your mortgage rate right now so locking prior to Wednesday may be prudent.

Then, on Thursday, the Consumer Price Index figures from October will hit the wires.

CPI is a popular measure of inflation and is expected to show that the average “cost of living” increased by 0.3% in October overall, and 0.2% if we exclude the highly volatile prices of food and energy.

Because inflation is the enemy of mortgage bonds, stronger-than-expected CPI data would be expected to push mortgage rates higher.

Related Articles:

Mark Taylor | Arizona Home Loans | Blarming | Will You Listen to Me | Arizona Short Sales | Arizona Foreclosures | Arizona FHA Loans | Arizona USDA Loans | Arizona HUD Homes | Ariona VA Loans | Fix My Broken Credit | Arizona Mortgage | Arizona Short Sale | Power Ranch Bank Owned Homes

Your Reply

You must be logged in to post a comment.