As predicted, last week was a choppy week with the market giving us some exciting ups and downs only to end up unchanged for the week (at least Fannies were unchanged). So after much nail biting we had rates pretty much unchanged for the week. This week should be an interesting one with Christmas tossed into the mix. Traditionally the last week of the year is pretty lightly traded and with volume down we are apt to see big swings.
This week does have more than Christmas on the Calendar:
- Monday, December 21: No news day today, but so far it looks like Stocks are having a bit of a Santa Claus Rally and that is not good news for rates. Look for a bump up in rates today.
- Tuesday, December 22: Final Estimate of third Quarter GDP expected +2.8%. The beginning of the year had business bleeding off inventory, and in the third quarter we saw some of that inventory come back which is good news for manufacturing sectors. It will need to be a much weaker number of 2.5 or less to improve rates.
- Tuesday: Existing home sales came in up 7.4% which is much better than expected. (sorry I forgot to put this on the calendar yesterday.) Good news is bad news for rates.
- Wednesday December 23: (is it time to stop working yet?)
- Wednesday: November Personal Income, spending and consumption expected +0.5%, +0.7% and +0.1%. The most important piece of this report is the PCE index (consumption). This weak estimate is enough to off set the stronger pieces of this report. As forecast This report should be supportive of steady rates.
- Wednesday: November New Home Sales expected up 2.1%. Not likely to be a market mover.
- Thursday December 24: Initial jobless claims: expected -10,000. The volatility this time of year with seasonal factors makes this report pretty worthless for predicting any actual employment report in the future.
- Thursday: November Durable Goods expected +0.5%. There is speculation that factory output might be stronger than reports have shown, so if this number comes in strong it will be a bad news event for mortgage rates ESPECIALLY on a lightly traded Christmas Eve
- Thursday: Market closes at 2pm for the Christmas Holiday.
- Friday: MERRY CHRISTMAS!
There are two big issues to chew through this holiday week, First off is the Holiday. Something about this time of year that keeps people from working, Thus VERRRRY light trading in the markets is typically the norm. Light trading typically leads to a volatile market with big swings. From a numbers standpoint, The biggie of the week is the PCE index on Wednesday, this is the number that shows what the consumer is actually doing with their money and it is a favorite of the Fed's. Ahead of any other news, it is likely we may see a bit more profit taking this week as we did see on Friday last week and again on Monday this week.
I just want to wish you all a VERY Merry Christmas, Maybe not politically correct but heck, it is Christmas week after all!
Rob
Mortgage Banker
www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf
(732)223-1630 x102
Since 1987 I have been helping my clients fulfill their dream of home ownership!
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