Rates Flat Despite Mostly Weaker Economic Data

Mortgage interest rates were flat on the week despite mostly weaker than expected economic data. Economic data weaker than expected included the September Chicago Fed National Activity Index, the July Case Shiller Home Price Index, August New Home Sales, September Consumer Confidence, August Pending Home Sales, weekly jobless claims, August Personal Income, the August PCE Price Index and the Core PCE Price Index, and the University of Michigan Consumer Sentiment Index. The Core PCE Price Index was up just 1.3% year over year, well below the Fed’s 2.0% target, calling into question a Fed rate increase prior to the end of the year. Economic data stronger than expected included the September Richmond Fed Manufacturing Index, August Durable Goods Orders, and the September Chicago Purchasing Managers Index. The Treasury auctioned $88 billion of 2 Year Notes, 5 Year Notes, and 7 Year Notes, which were met with reasonably strong demand. President Trump is promoting tax cuts.

The Dow Jones Industrial Average is currently at 22,364, up slightly on the week. The crude oil spot price is currently at $51.39 per barrel, up almost $1 per barrel on the week. The Dollar strengthened versus the Yen and Euro on the week.

Next week look toward Monday’s ISM Manufacturing Index and Construction Spending, Wednesday’s ISM Service Sector Index, Thursday’s International Trade, Jobless Claims, and Factory Orders, and Friday’s employment report for September and Consumer Credit as potential market moving events.