Good Morning. There was a time when investors hoped that the Fed would stop curtailing the stimulus program. Even though it was expected, the markets always reacted negatively to speculation as to what would happen when the Fed got out of the bond and mortgage backed securities purchasing program it has been in since the recession. Well now, we are about to find out.
The Fed released the minutes from its June meeting and targeted October to end its purchasing program. Surprisingly, investors reacted positively to the news and the market actually increased slightly. Now investors have accepted the fact that the program is going to end and they seem to be going about their daily business without getting caught up in the “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 as the stimulus program comes 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%. This is a larger increase than we have seen in some time. Applications are still off by more than 17.0% from the same time last year, but 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 30th and companies are beginning to release their 2nd Quarter sales and profit reports. So far there have been no real surprises which is why the stock market continues to trade in a narrow range. Many reports are due out over the next two weeks.
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 local reverse mortgage professional, I am happy to assist you with any information that you may need regarding reverse mortgages. I welcome the opportunity to serve you in any way that I possibly can. Please feel free to reach me at 831-645-1164. ~