MIG Market Watch, April 13th, 2020
MARKET COMMENT Mortgage bond prices finished the week higher which put downward pressure on rates. The Fed dominated trading and overshadowed all the data releases with a steadier approach to pushing rates lower. There was no data the early part of the week. Producer prices fell 0.2% vs the expected 0.4% decrease. Core prices, which exclude volatile food and energy, rose 0.2% vs the expected 0.1% decline. Weekly jobless claims were a record 6.606M vs the expected 5M. Consumer sentiment was 71. Analysts looked for a reading of 79. This was a bad sign for the economy ahead. Consumer prices fell 0.1% vs an expected 0.1% increase. The core fell 0.4% vs a 0.3% decrease. Mortgage interest rates finished the week better by approximately 1/2 of a discount point.
LOOKING AHEAD
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Retail Sales | Wednesday, April 15, 8:30 am, et | Up 1.4% | Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates. |
| Industrial Production | Wednesday, April 15, 9:15 am, et | Up 0.4% | Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates. |
| Capacity Utilization | Wednesday, April 15, 9:15 am, et | 75.3% | Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates. |
| Business Inventories | Wednesday, April 15, 10:00 am, et | Up 0.2% | Low importance. An indication of stored-up capacity. A significantly larger increase may lead to lower rates. |
| NAHB Housing Index | Wednesday, April 15, 10:00 am, et | Up 1.4% | Moderately Important. A measure of single family housing. Weakness may lead to lower mortgage rates. |
| Weekly Jobless Claims | Thursday, April 16, 8:30 am, et | 387K | Important. An indication of employment. Higher claims may result in lower rates. |
| Housing Starts | Thursday, April 16, 8:30 am, et | 610K | Important. A measure of housing sector strength. Weakness may lead to lower rates. |
| Philadelphia Fed Survey | Thursday, April 16, 10:00 am, et | 6.8 | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
| Leading Economic Indicators | Friday, April 17, 10:00 am, et | Up 0.2% | Important. An indication of future economic activity. A smaller increase may lead to lower rates. |
BUSINESS INVENTORIES The report on business inventories gives a broader look at the durable goods, factory orders, and retail sales reports. Not only is this report an important part of the investment component of the GDP, but it also provides additional evidence about the economy in the upcoming months. Changes in business inventories slow as the economy approaches a peak and rise as the economy approaches the trough of a recession. Therefore, the change in business inventories is a leading indicator of GDP. The data for this report, which are published by the Department of Commerce’s Census Bureau, comes from a monthly survey of inventories, orders, and manufacturers’ shipments, in addition to the merchant wholesalers and retail trade surveys.
