Austin Mortgage Blog

Posts Tagged ‘economy’

Not to say we will not see lower Austin mortgage rates and better pricing but for that to come to fruition, we’ll need a major catalyst

Initial Weekly Claims fell 19K, Continuing Claims dropped 45K, and Durable Goods dropped 1.1%.  Month end hedge fund extensions and risk related worried and still in play as well.  Taking the big picture view, Austin mortgage interest rates have adopted a soft housing and employment situation stateside, along with global debt and growth issues that just won’t go away.

With the 10 year note now trading at 3.09%, a level not seen since last April, many are talking about our market being “bubble-ishous”.  The other contingent thinks bond prices are just “insane”.  With the 10 year yield at levels not seen since 2008 and 1962, one would think that a correct is imminent.  Quite possible but not a given.  Technically, our chart work makes a case for 2.92% to 2.78% on the 10 year note.  All depends on stocks and the economy.  Even the FOMC “downgraded” the economy to underperform.

Early buying today has started to show signs of a new bullish trend, endorsed by almost every oscillator.  The key to a new trend will be a close below 3.09% on the 10 year note.  This will activate a break of the major double top which has been in place for over a year.  “If” this happens, the next target will be 2.88%.  Not to throw cold water on the bulls but we think this market is a little long in the tooth, pricing in as much bad news as one could imagine.

Not to say we will not see lower Austin mortgage rates and better pricing but for that to come to fruition, we’ll need a major catalyst.  Something like a stock market rout or collapse of Greece.  In English, the smart money will bet against this, at least for a corrective trade that could take the 10 year note back to 3.25%.  Pricing was struck with MBS unchanged, now down 5/32’s. Trigger fingers are getting twitchy.

With Austin mortgage rates at or near historic lows, best bet is to take a little off the table before the market “potentially” picks your pocket. Careful out there.

Expect Austin mortgage rates to stay low for some time to come

Just when you thought the economy was doing a little better……. someone throws cold water on it. The chill came via Weekly Unemployment Claims which jumped 12K to 472K. The higher than expected claims number was largely the result of new filers from manufacturing, construction, and educational services.

Continuing Claims rose as well, up 88K on the week. CPI, inflation at the consumer level fell .2% with the core index up .1%. Just like PPI, nothing in the cards here to rattle the Fed. Philly Fed was also on tap, falling like a rock from 21.4 to 8. Employment indicators within the index did the damage, falling 1.7 points.

Last but not least, Leading Indicators rose .4% in May. Nothing special here as this index is widely treated as “rear view mirror” data and typically kicked to the curb. Overall, what is starting to take shape is a weakening situation in both housing and employment, coupled with falling consumer confidence. The BP mess doesn’t help either as the sickening scene from continued oil flowing does nothing for one’s psyche.

Market’s are red hot for bond bulls and woe is me for stock holders. Dow off 50 points has led the 10 year note higher by 20/32’s (yield 3.21%). Mortgage backs are plus 11/32’s, having a nice day as well. Technically, prices are nearing the best levels of the year (3.14% yield). Bulls will need to close below that level (3.13% or lower) to break out of the triangle pattern we’ve had in place since May. Daily oscillators however are bearish so overall, we do not have all time frames in harmony.

In English, it will become more and more difficult to improve Austin mortgage pricing/ lower yields without new fuel (catalyst). At the same time, the economic fundaments do not support higher Austin mortgage rates or worsening mortgage pricing. So, expect Austin mortgage rates to stay low for some time to come. Stay tuned for tomorrow.

Austin Mortgage Market Update – For the week of May 3, 2010

For the week of May 3, 2010 – Vol. 8, Issue 18

>> Market Update INFO THAT HITS US WHERE WE LIVE Last Tuesday’s S&P Case-Shiller home price index reported that homes in 20 major U.S. cities were WORTH MORE in February 2010 than they were in February 2009 — the first year-to-year INCREASE in values in over three years! The good news of this 0.6% annual gain was tempered by a small monthly decline in prices from January to February. But remember, February’s unusually stormy weather make it a tough month for real estate in much of the country. ??Corroborating Case-Shiller, a second home price index also showed a national gain in home prices for February 2010 compared to February 2009. This was the First American CoreLogic HPI, an index including distressed sales, which reported a home price increase of 0.3% for the year. >> Review of Last Week IT’S ALL GREEK TO WALL STREET… The stock market ended down after a volatile week whose off-putting news ranged from Greece to Washington to the Gulf of Mexico. Greek bonds were downgraded to junk, while Portugal and Spain got downgrades too. Goldman Sachs execs were grilled in Washington, then Friday came news of a federal criminal probe into the firm. Finally, energy stocks got hammered following a terrible oil spill in the Gulf of Mexico. In spite of these unfortunate events, the economy continued to offer up signs of recovery. On Tuesday, following the Case-Shiller annual home price INCREASE reported above, we got a big boost in the Conference Board’s consumer confidence number for April. The 57.9 reading put it at its highest level since August 2008. The week ended with a great Chicago PMI measure of Midwest manufacturing. Then Advanced Q1 GDP came in UP 3.2%, marking the third straight quarter of economic growth, with that all-important consumer spending UP 3.6%! Things weren’t too shabby on the corporate earnings front either. Of the 170 S&P 500 companies reporting Q1 results, 130 of them beat earnings-per-share estimates. Even better, 106 of these companies topped revenue expectations, showing that strong earnings performance didn’t just come from belt-tightening. For the week, the Dow ended down 1.7%, to 11008.61; the S&P 500 was down 2.5%, to 1186.69; and the Nasdaq was off 2.7%, to 2461.19. Down-sliding stocks and off-putting news at home and abroad sent investors scurrying to bonds which sent prices up even after Friday’s positive economic reads. The FNMA 30-year 4.5% bond we watch closed UP 75 basis points for the week, ending at $100.84. National average mortgage rates are holding steady, still at historically low levels, according to Freddie Mac’s weekly survey. >> This Week’s Forecast INCOME, INFLATION, JOBS… A slight gain in Personal Income is expected today, along with a tick up in the PCE inflation measure. ISM Manufacturing and ISM Services numbers should show those sectors continuing to expand. Tuesday, March Pending Home Sales will be interesting, as we’ll see if lots of people signed contracts to get in on the tax credit. The week’s biggie is Friday’s April Employment Report. Jobs should continue to be added at a modest pace, although the monthly increase in workforce will probably keep the Unemployment Rate level.  >> The Week’s Economic Indicator Calendar Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. Economic Calendar for the Week of May 3 – May 7 Date Time (ET) Release For Consensus Prior Impact M May 3 08:30 Personal Income Mar 0.3% 0.0% Moderate M May 3 08:30 Personal Consumption Expenditures (PCE) Mar 0.6% 0.3% HIGH M May 3 10:00 ISM Index Apr 60.1 59.6 HIGH Tu May 4 10:00 Pending Home Sales Mar 5.0% 8.2% Moderate W May 5 10:00 ISM Services Apr 56.0 55.4 Moderate W May 5 10:30 Crude Inventories 5/1 NA 1.96M Moderate Th May 6 08:30 Initial Unemployment Claims 5/1 440K 448K Moderate Th May 6 08:30 Continuing Unemployment Claims 5/1 4.600M 4.645M Moderate Th May 6 08:30 Productivity–Prelim. Q1 2.8% 6.9% Moderate F May 7 08:30 Average Workweek Apr 34.0 34.0 HIGH F May 7 08:30 Hourly Earnings Apr 0.1% –0.1% HIGH F May 7 08:30 Nonfarm Payrolls Apr 187K 162K HIGH F May 7 08:30 Unemployment Rate Apr 9.7% 9.7% HIGH >> Federal Reserve Watch Forecasting Federal Reserve policy changes in coming months Coming out of last week’s FOMC meeting, the Fed didn’t change its policy to keep interests rates at the current level for an “extended period.” Economists are now pushing off any rate hike to the end of this year. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%–0.25% After FOMC meeting on: Consensus Jun 23 0%–0.25% Aug 10 0%–0.25% Sep 21 0%–0.25% Probability of change from current policy: After FOMC meeting on: Consensus Jun 23 5% Aug 10 10% Sep 21 17%

Quiet Week for Austin Mortgage Markets

During a very light week for economic news, the economic data and Treasury auctions contained few surprises and produced little reaction in mortgage markets. Mortgage rates ended the week nearly unchanged.

In early 2009, the Fed embarked on a $1.25 trillion mortgage-backed securities (MBS) purchase program to help keep mortgage rates low and stimulate the economy. The amount purchased varied from week to week, reaching a peak of $33.2 billion in the week of March 25, 2009. The Fed has been gradually reducing the size of its purchases at a pace consistent with a March 31 conclusion of the program, and the most recent weekly purchases have been down to around $10 billion.

As the date nears, the big question is what will happen when the MBS purchase program ends. This program is unprecedented, making the outcome difficult to predict, and forecasts vary widely. Estimates for the impact on mortgage rates from the conclusion of the program vary from an increase of one percent to no change. Those who predict higher mortgage rates point to a basic change in the fundamental supply and demand. The added demand from the Fed was widely credited with moving rates lower, and a decrease in demand would typically push rates higher. However, other economists argue that investors respond only to unexpected news. In this view, since the Fed has telegraphed the end of the program for months, there should be little reaction around March 31. The Fed itself has indicated that they expect a modest increase in Austin mortgage rates due to the end of the program.

Week Ahead

The big story next week will be Tuesday’s Fed meeting. No change in the fed funds rate is expected, but any surprises in the Fed’s statement could produce a large reaction. The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of “intermediate” goods used by companies to produce finished products and will come out on Wednesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Thursday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Industrial Production, an important indicator of economic activity, will be released on Monday. Housing Starts are scheduled for Tuesday. Import Prices, Leading Indicators, and Philly Fed will round out a busy week.

Technically, the market is trading within the range formed since last Friday

New day, same story but maybe with a  twist.  Equity markets, both across the pond and stateside rallied this morning on news that ECB President Trichet caught an earlier flight out of Aussie land and headed home, presumable to figure out what to do with the PIGS (Portugal, Ireland, Greece, and Spain).  All rumor at this point but maybe a bailout is in the works.  Wonder who will pay for that.

Bonds, notes, and mortgage backs were under pressure early but only by a couple of 32’s while stocks jumped 150 on the big board.  Since the open, stocks have given up nearly half their gains and mortgage backs are unchanged while the 10 year note is up 1/32^nd trading at 3.59%.  Trading fixed income of late is “cat” like, requiring one to be quick at the switch.  Reason is that being risk adverse is a headline by headline event.  With little insight on the risk markets other than to expect just about anything, traders must balance auction supply and the White House with “Who Dat” across the pond.

Lucky for us, DC is closed for another day.  Earlier today, the NFIB Small Business Index improved 1.3 points as many plan to increase employment.  Trouble is expectations for the economy to improve fell a point.  Wholesale inventories were also released, down .8% with Sales up .8%.  Durable Goods did the damage, down 1.1%.  It appears that inventory rebuilds may have misjudged draw downs, something we talked about as a concern going forward.  Out in about an hour, we’ll see who shows up to buy 40 billion of 3 year notes.  This auction should go well.

Tomorrows 10 year and Thursday’s 30 year bond auctions will tell the tale of the tape.  Technically, the market is trading within the range formed since last Friday.  We see the action as neutral but cautious.

Treasury Secretary Geithner is medium rare as the House Oversight Committee is grilling him on AIG

Treasury Secretary Geithner is medium rare as the House Oversight Committee is grilling him on AIG.  Undisclosed documents, backroom deals, maybe a cover up coordinated with Sir Bernanke, and the counter parties all paid off at par (by the taxpayers) are the hot topics.  As we speak, their search for a smoking gun continues.

The FOMC is finishing up their two day meeting with any change in short term rates and policy statement due out at 1:15 pm cst.  The consensus thinking is that they will continue their low interest rate policy for an “extended period of time”.  We also expect the FOMC to note that the economy still has “challenges” with some improvement seen within the economy.

Given today’s power packed agenda, the FOMC should not move the market.  Earlier this morning, New Home Sales dipped by 7.6% to 342K units.  Sales gains in the Northwest and West were over shadowed by losses in the Midwest and South.  Housing, along with employment, needs to be top priority for our country.  Let’s see what the CEO of the U.S. has to say tonight.

We also have 42 billion of 5 year notes on the auction block.  Results are due at high noon cst.  Given the anxiety in stocks and overseas markets, we expect the issue to go well.  Trouble with this call is that it is happening on a FOMC day and historically, only one out of the last five have come in on the screws.  The others had been sloppy.  Technically, the market is making higher highs and higher lows, holding the bullish regression line.

Once again we challenged the 3.56% yield level and have backed away.  Currently, the 10 year note is up 6/32’s (yield 3.61%), mortgage backs up 3/32’s, and stocks off 30 something on the big board.  Buckle up!

Factors good for mortgage pricing and bad for your 401K

China is in the news, telling its regulators to put a hold on new bank loans.  This follows a .50bps rise in reserve requirements put in place last week.  Stateside, PPI, inflation at the producer level, rose .2% headline while the core index (ex-food and energy) was unchanged.  Food prices rose 1.4% ( maybe high priced OJ) and finished energy goods were up .5%.  Other than that, the report was inflation friendly and given the slack in the economy, should not give the Fed any heartburn.

Housing Starts were also released, falling 4.0% to 557K.  The below consensus print took its punishment from single family homes down 6.9% and unseasonable cold weather for much of December.  Building Permits when the other way, rising 10.9%.  Interesting news from Pimco, the world’s largest bond fund on their changes in asset allocation.  In December, they dropped their holdings of government related bonds from 51% to 32%, increased cash holdings from 7% to 8%, and increased holdings in both mortgage backed securities and dollar denominated developed market debt (Germany, etc.) to 17%.  Bill Gross, Pimco’s bond god, said the decisions were based on their view of the dollar’s direction (negative) and increased government debt.  All of the above has been good for mortgage pricing and bad for your 401K.

Stocks are really taking some heat, down 200 points on the big board.  10 year notes are plus 16/32’s (yield 3.65%) and mortgage backs are plus 6/32’s.  Yesterday we talked about the 3.67% level being key for near term direction.  If we can close below that level (currently at 3.64%), we should have a little more giddy up in our getalong.  Buy signals are all over the chart along with positive trend signals on 8 day ADX.  Given the close we are looking for, next target on the chart points to 3.55%.  Shaping up to be a good day for the good guys/gals.

Austin Mortgage Market Update – For the week of January 18, 2010

For the week of January 18, 2010 – Vol. 8, Issue 3 >> Austin Mortgage Market Update INFO THAT HITS US WHERE WE LIVE Our hearts go out to the people of Haiti recovering from the terrible tragedy of last Tuesday’s earthquake. We know everyone’s thoughts are with the Haitians. It has been inspiring to see the American people support the relief efforts in so many ways.??Last week, housing market news was thin on the ground. It was good to see that fixed-rate mortgage rates dropped again, according to Freddie Mac’s weekly survey of conforming mortgages, which came out Thursday. The report was accompanied by encouraging words from Freddie Mac’s chief economist Frank Nothaft, who said: “The Federal Reserve recently reported positive news in both the housing market and the overall state of the economy in its January 13 regional economic report….Economic activity improved in 10 of its 12 districts. Home sales…increased due in part to the home-buyer tax credit and house prices appeared to have changed little since its last report.” The bottom in home pricing appears to have formed in many areas of the country. >> Review of Last Week DOWN FOR THE WEEK, UP FOR THE YEAR… Things weren’t very pretty in the stock markets on Friday, the drop in prices offsetting earlier gains, so all market indexes ended down for the week, though still UP for this very young year. Let’s hope the overall economy stays UP as well! There certainly were some encouraging signs in last week’s economic reports. The trade deficit in November grew by $3.2 billion, a little more than expected. But the key part of the report showed the total volume of trade has been shooting upward for the past several months. Exports, since bottoming in April, are UP seven straight months, growing 24.4% annually. December retail sales were down 0.3%, which disturbed some people who apparently missed the big upward revisions to November’s numbers. If we put in these revisions, sales gained 0.3% overall, 0.5% excluding autos. Over the last three months, retail sales are up at an 11.3% annual rate (7.1% excluding autos). Of course, jobs continue to be a concern and Initial Unemployment Claims were up slightly for the week, but the four-week moving average dropped to its lowest level since August 2008. Continuing Claims are now down to 4.6 million. The week ended with a tame inflation number, the Consumer Price Index (CPI) up just 0.1% for December. We also had industrial production UP 0.6% for December, bringing it to a 9.6% annual rate over the past six months. The influential Empire State Index zoomed from 4.5 to 15.9 in a single month, showing a nice rebound for manufacturing in the New York region. For the week, the Dow was down 0.1%, to 10609.65; the S&P 500 was down 0.8%, to 1136.03; while the Nasdaq was down 1.3%, to 2287.99. A benign inflation reading and a sliding stock market helped bond prices end the week headed in the right direction. The FNMA 30-year 4.5% bond we watch ended UP 66 basis points for the week, closing at $100.75. Mortgage rates should stay at their historically low levels for a while longer and, as noted above, average rates dropped in the most recent Freddie Mac report. >> This Week’s Forecast NEW HOMES NEWS… The markets will be closed Monday for Martin Luther King Jr. Day. The four days remaining will give us a few interesting indicators. Wednesday we’ll have another look at the market for new homes, with December figures for Housing Starts and building Permits. We’ll also have the PPI reading on wholesale inflation. Q4 corporate earnings season continues and we’ll keep an eye out for more signs of economic recovery. There will be lots of action, from Bank of America and Goldman Sachs, to IBM and Google, and from Starbucks to McDonald’s. >> The Week’s Economic Indicator Calendar Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. ??Economic Calendar for the Week of January 18 – January 22 Date Time (ET) Release For Consensus Prior Impact W?Jan 20 08:30 Housing Starts Dec 575K 574K Moderate W?Jan 20 08:30 Building Permits Dec 580K 584K Moderate W?Jan 20 08:30 Producer Price Index (PPI) Dec 0.0% 1.8% Moderate W?Jan 20 08:30 Core PPI Dec 0.1% 0.5% Moderate Th?Jan 21 08:30 Initial Unemployment Claims 1/16 NA 444K Moderate Th?Jan 21 08:30 Continuing Unemployment Claims 1/9 NA 4.60M Moderate Th?Jan 21 10:00 Leading Economic Indicators (LEI) Dec 0.7% 0.9% Moderate Th?Jan 21 10:00 Philadelphia Fed Index Jan 18.8 20.4 HIGH Th?Jan 21 11:00 Crude Inventories 1/15 NA 3.70M Moderate >> Federal Reserve Watch Forecasting Federal Reserve policy changes in coming months. Economists are back to thinking that nothing will change with the Fed Funds Rates during the first half of the year. They’re probably correct — unless we start getting scary inflation numbers or a nice spike in the recovery. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%–0.25% After FOMC meeting on: Consensus Jan 27 0%–0.25% Mar 16 0%–0.25% Apr 28 0%–0.25% Probability of change from current policy: After FOMC meeting on: Consensus Jan 27 1% Mar 16 1% Apr 28 3%

This blog entry is an advertisement for Max Leaman. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is copyrighted by PrimeLending, A PlainsCapital Company and cannot be reproduced for any use without prior written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer distribution. The material does not represent the opinion of PrimeLending, A PlainsCapital Company. © 2010 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, a PlainsCapital Company (NMLS #: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AL, AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NY, NC, OH, OK, OR, PA, SC, SD, TX, UT, VA, WV, WY. Licensed by the Arizona Dept. of Financial Institutions-license #BK 0907334; California Department of Real Estate-license ID #01857468; California Department of Corporations- license #4130996; Connecticut Department of Banking-license #ML-13649; District of Columbia Department of Insurance, Securities and Banking- license #MLO13649, Illinois Dept. of Financial and Professional Regulation-license #MB.6760635; Indiana Dept. of Financial Institutions- license #11169; Maine Dept. of Professional & Financial Regulation-license #SLM8285; Maryland Dept. of Labor, Licensing & Regulation-license #11058; Massachusetts Division of Banking- license # MC5404, Michigan Dept. of Labor & Economic Growth-license #FR 0010163 and SR 0012527; Nevada Dept. of Business and Industry, Division of Mortgage lending-exempt license #732; New Hampshire Dept. of Banking- license #14553-MB; New Jersey Dept. of Banking and Insurance-license #0803658; New Mexico Regulation and Licensing Dept., Financial Institutions Division-license #01890; North Dakota Dept. of Financial Institutions-license #MB101786; Tennessee Dept. of Financial Institutions-registration #4023; Texas Regulated Loan License-license #7293; Vermont Dept. of Banking, Insurance, Securities and Health Care Administration- lender license #6127 and broker license #0964MB; Washington Dept. of Financial Institutions-license #520-CL-49075; Wisconsin Department of Financial Institutions-license #214170. NMLS# 151263

Interest Rate Forecasting Has Been Tough to Handicap – If You Like IT, Lock It

CPI, inflation at the consumer level, came in below expectations at plus .1%. Core inflation, the index that backs out food and energy, rose .1% as well. Most of the meager rise in the overall index came from fuel oil prices which were up 1.1%. Unadjusted consumer inflation now stands at 2.7%. Core inflation is not expected to pose much of a problem given the large amount of slack in the economy. Matter of fact, if the employment picture continues on its current, slow growth or no growth pattern, the slack I’m talking about could be with us for a couple of years.

The New York Fed’s Empire State Manufacturing index was also released, up 11.42 points to 15.92. The better than expected report was driven by soaring new orders, up over 18 points. Shipments rose nearly 13 points as well. The bounce was expected (just not so much) after the steep decline in December. We’ll want to see if this is sustainable or just another inventory rebuild. Next up was Industrial Production which rose .6%. This was on the screws per economists’ consensus. Manufacturing output however fell .1% which is being blamed on a cold, wet December. Last but not lease was the Michigan Sentiment Survey posting a plus .3 reading at 72.5. This “consumer feel good” index reflects a consumer who feels better about the economy going forward yet is still cautious.

Post data, fast money traders bought the market aggressively in both Treasuries and MBS. Jitters over global credit (Greece, Spain, Italy, etc.), concerns about 10% unemployment being with us for most of 2010, and the gang on Capitol hill continuing to tax and spend are all supportive of the interest rate complex (due to investor uncertainty).

Mortgage backs are up 4 to 8/32’s, depending on the note rate while the 10 year note is trading at a yield of 3.67%. We talked about needing a close at or below 3.71%. Looks like we could get it today. The ramifications (given that kind of close) reinforce buy signals on the daily chart and will kick in a new bullish trend signal. It would power us back to the 3.57%-3.62% yield mark, improving mortgage pricing from today’s level. Keep in mind that interest rate forecasting has been tough to handicap, giving us hope for a day only to turn into a one hit wonder. Same rules apply with such a volatile environment; if you like it, lock it. We’ll try to wrap this up later today.

Employment Data Surprises

After several weeks of strong performance, it was a tough week for mortgage markets. Stronger than expected economic data and an improved economic outlook from the Fed increased concerns about future inflationary pressures. Rising inflation expectations result in higher yields, and mortgage rates increased during the week.

The big news this week was the Employment report. Against a consensus forecast for a loss of -125K jobs in November, the economy lost just -11K, and the figures from prior months were revised higher by 159K. This represented the strongest monthly data since December 2007. The Unemployment Rate unexpectedly dropped to 10.0% from 10.2% in October. While weakness remained in manufacturing and construction, the service sector added jobs. Average Hourly Earnings, an indicator of wage growth, rose slightly.

This week’s housing data also exceeded expectations. October Pending Home Sales rose for the ninth consecutive month, increasing 4% to the highest level since March 2006. The index is up 32% from one year ago. Pending sales are based on contracts signed but not yet closed and are a leading indicator of housing market activity. The homebuyer tax credit again provided a lift.

Week Ahead

Next week will be a light one for economic data. The Trade Balance will be released on Thursday. Retail Sales, which account for about 70% of economic activity, will come out on Friday, along with Import Prices and Consumer Sentiment. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.