Please enjoy this quick update on what happened this week in the housing and financial markets.
It seems like investors are back in the stock market.
- This is the second week that the broader indexes finished in positive territory.
- As of Friday morning that Dow is up just under 300 points for the week.
The biggest economic news for the week was the Labor Department’s Employment Report.
- The headline showed that the market added a very strong 242,000 jobs in the month of February.
- This number far exceeded the highest expectations of only 217,000.
- To add strength to the report, the prior two-month’s positive employment numbers had upward revisions of a combined 30,000.
In early trading, the stock market is down about 45 points.
- Where it would normally be that, the better than expected jobs report should create a market rally, there is a negative aspect of the employment report that seems to have investors concerned.
The labor department’s report showed a 0.1 percent decline in hourly earnings.
- This decline is in the opposite direction of January’s 0.5 percent increase.
- Additional concern in the labor data is that year-on-year earnings are down 2.2 percent.
- To add to the sentiment that the report is not as strong as the headline indicates is that there was a slight drop in workweek hours.
To remain positive, it is important to realize that the overall the increase in jobs, and the fact that the unemployment rate remained unchanged at 4.9 percent, is cause for optimism towards future economic growth.
The pending home sales index surprised many people in that the sales of existing homes were down in January by an unexpected 2.5 percent.
- Analysts were anticipating an increase of 0.5 percent.
- December’s numbers were revised upward by 0.8 percent showing a total increase of 0.9 percent.
- Some experts are predicting that when January’s revision comes out next month, there will likely be an upward revision to this week’s report.
- Compared the same time last year pending home sales are higher by 1.4 percent.
Over the last couple of weeks, mortgage rates have been ticking upward.
- Although they remain near historic lows, nonetheless applications for refinances will always be very sensitive to interest rate movements.
- The Mortgage Bankers Association reported that for the last full week of February applications for purchases and refinances declined 1.0 percent and 7.0 percent respectively.
As mortgage rates likely continue to inch up, it is probable that the refinance numbers will continue to decline.
- Purchase applications are not affected the same way with interest rate movements.
- Good news for the housing market is that many real estate and mortgage professionals have reported a significant uptick in purchase activity in the last week.
Next week there are very few potential market- moving reports:
- Wednesday March 9th – MBA Applications & EIA Petroleum Status
- Thursday March 10th – First Time Jobless Claims