Hummer Forums by Elcova - Moderator

I'm being targeted by viscious PM attacks. I just received this today. Ahhhhhhhh!

Quote:

Originally posted by Adam in CO:
Monday, April 3rd
The ISM manufacturing index fell 1.5 points to 55.2% in March, less than an expected level of 57.5%. Estimates were based on gains in regional manufacturing indexes. March's decline was led by a slowdown in new orders while most other components remained fairly firm. The price index did rise indicating increased price pressures for manufacturers. Nevertheless, the level of the ISM index suggests that national manufacturing conditions continue to expand solidly.
Construction spending increased 0.8% in February, besting expectations for a 0.5% gain. Moreover the previous two months were revised higher. Strong spending in February was surprising given slower new home sales and severe winter weather during the month. Spending growth so far in Q1 is faster than Q4 levels indicating that construction spending will add positively to first quarter economic growth.
The NAR pending home sale index fell 0.8% in February after rising 0.9% in January. Pending home sales were 5.2% lower than in February of a year ago. A pending sale is one in which the contract is signed but the transaction has not yet closed. The index is considered a leading indicator of exiting home sales. The February decline then suggests continued softening in existing home sales going forward.

Tuesday, April 4th
Motor vehicle sales slipped 0.1% in March to an annualized pace of 16.6 million units. Car sales rose slightly while light truck sales declined modestly during the month. Despite the decline, vehicle sales totaled 17.0 million units over the last twelve months, in line with long term averages. Q1 vehicle sales are stronger than in Q4 which will push consumer spending higher and contribute to overall economic growth.
The Fed's policy statement last week did little to quell rate hike expectations. Indeed fed funds futures traders this week are fully pricing in another quarter point bump at the May 10 FOMC meeting to bring the target for the fed funds rate to 5.0%. Many economists would consider a 5.0% target on the high side or just over neutral, which could effectively be a drag on economic growth. Currently traders are pricing in roughly a 30% chance of another rate hike at the June 28-29 meeting.

Wednesday, April 5th
The ISM non-manufacturing index increased to 60.5% in March from a level of 60.1% in February. The employment component showed slower job growth in the service industries as price gains eased. The service sector continues to expand solidly and is consistent with GDP growth of around 4.0%.
The MBA mortgage applications index jumped 7.2% to 612.8% for the week that ended March 31. The increase was surprising given higher mortgage rates over the last two weeks. Purchase applications were up 8.4% for the week and refinancings gained 5.3%. Home owners and buyers are probably moving into the application process ahead of what is expected to be even higher rates going forward.

Thursday, April 6th
Lenders raised mortgage rates to a two-and-a-half year high this week on faster Q1 growth and higher energy prices which both raised inflationary concerns. 30-year fixed rate mortgages averaged 6.43% this week compared to 6.35% last week according to Freddie Mac's mortgage market survey.
Jobless claims fell 5k to 299k for the week that ended April 1. The level of claims indicates healthy market conditions and is consistent with monthly payroll growth of around 200k.

Friday, April 7th
The economy created 211,000 new jobs in March, stronger than estimates for a 190,000 gain. Net downward revisions of 34,000 payrolls in the previous two months off set some of March's strength. Wage pressures eased slightly last month gaining a tamer 0.2% on the month and 3.4% on the year. Much stronger labor market conditions run the risk of higher wage gains which is the key driver of inflation. Economists expect the cooling housing market and resultant job declines to release some wage pressures through this year.

Stock Market Close for the Week
Index Latest A Week Ago Change
DJIA 11120.04 11109.40 +10.64 or +0.09%
NASDAQ 2339.02 2339.79 -0.77 or -0.03%

WEEK IN ADVANCE
The holiday shortened week proffers a few economic releases of interest including retail sales, industrial production, import prices and international trade. The data along with energy prices and interest rates will continue to dominate market action.
Key Interest Rates Latest 6 Mos Ago 1 Yr Ago
Prime Rate 7.75 6.75 5.75
Fed Discount 5.75 4.75 3.75
Fed Funds 4.75 3.85 2.81
11th District COF 3.604 2.870 2.317
10-Year Note 4.95 4.37 4.48
30-Year Treasury Bond 5.03 4.56 4.76
30-Yr Fixed (FHLMC) 6.43 5.98 5.93
15-Yr Fixed (FHLMC) 6.10 5.54 5.48
1-Yr Adj (FHLMC) 5.57 4.77 4.23
6-Mo Libor (FNMA) 5.1196 4.2154 3.3876
Sources: IBC' s Money Fund Report; Bank Rate Monitor; Federal Home Loan Bank of San Francisco