Rates Increase Slightly as Stock Market Corrects

Mortgage interest rates increased slightly on the week as the stock market continued to lose ground. The stock indexes have fallen 10% indicating a market correction. Congress passed a two-year budget deal which will now be forwarded to President Trump for signature. The Congressional Budget Office estimates that the budget will add $320 billion to this year’s budget deficit. This deal also suspends the debt ceiling through March 1, 2019. The Treasury auctioned $66 billion of 3 Year Notes, 10 Year Notes, and 30 Year Bonds which were met with soft demand. Economic data was limited. Of note, the January ISM Services Sector Index, Jobless Claims, and December Wholesale Trade were stronger than expected. The ISM Services Sector Index reached its highest level in 20 years and Jobless Claims fell to their lowest level in 45 years. The December U.S. Trade Deficit, December JOLTS job openings, and December Consumer Credit were weaker than expected.

The Dow Jones Industrial Average is currently at 23,715, down over 1,800 points on the week. The crude oil spot price is currently at $60.19 per barrel, down over $5 per barrel on the week. The Dollar strengthened versus the Euro and weakened versus the Yen on the week.

Next week look toward Tuesday’s NFIB Small Business Optimism Index, Wednesday’s Consumer Price Index, Retail Sales, and Business Inventories, Thursday’s Jobless Claims, Philadelphia Fed Business Outlook Survey, Producer Price Index, Industrial Production, Empire State Manufacturing Survey, and Housing Market Index, and Friday’s Housing Starts as potential market moving events.