Stock Market Hits New Record Highs – Market Update


Tomorrow is Valentine’s Day (last-minute shoppers have been warned). There wasn’t much on the economic calendar last week, so that left the stock market calling the shots. It had a good week, so your 401(k) should be feeling a little bit of early love.
Headline News
International Trade: The nation’s trade deficit fell by $1.4 billion in December to $44.3 billion. Exports were up 2.7% to $190.7 billion in December. People seemingly wanted U.S. services at the end of the year. However, imports were up 1.5% to $235 billion. There were lots of imports of cars and trucks. Meanwhile, the petroleum gap was unchanged, with a deficit of $6.1 billion.
MBA Mortgage Applications: Mortgage applications were up 2.3% overall last week. Purchases were up 2.0% and refinances rose 2.0%. The average rate on a 30-year-fixed mortgage was down four basis points to 4.35%.
Jobless Claims: Initial jobless claims were down 12,000 last week to come in at 234,000. The four-week moving average was down 3,750, coming in at 244,250. It’s a bit of a mixed bag. Continuing claims were up 15,000 to 2.078 million. However, the four-week average of continuing claims is down 4,000 to 2.076 million.

Consumer Sentiment: Consumer sentiment fell 2.8 points to 95.7 in mid-February. However, this is still very strong. Expectations were down almost 5 points to 85.7. This is still a lot higher than it was going into the election. Current conditions remained pretty much unchanged at 111.2. In terms of inflation expectations, the one-year reading is up 0.2% to 2.8%. This is generally good because it means people will buy now if they expect prices to go up in the future. Five-your expectations are down 0.1% to 2.5%.
Mortgage News
Rates fell just slightly last week. If you’re in the market to buy or refinance, it remains a great time to lock your rate.
Interest rates on 30-year fixed-rate mortgages (FRMs) averaged 4.17% with an average 0.4 point for the week ending Feb. 9, 2017, down from last week when they averaged 4.19%. A year ago at this time, 30-year FRMs averaged 3.65%.
For 15-year FRMs, this week averaged 3.39% with an average 0.4 point, down from last week when they averaged 3.41%. A year ago at this time, 15-year FRMs averaged 2.95%.
Also, 5-year Treasury-indexed hybrid adjustable rate mortgage (ARMs) averaged 3.21% this week with an average 0.4 point, down from last week when they averaged 3.23%. A year ago, 5-year ARMs averaged 2.83%.
Stock Market
It’s to the point where it looks likes the stock market is hanging on President Trump’s every tweet , so when he talked about a “phenomenal tax plan,” businesses took that to mean good things for potential deregulation. This caused all three stock indexes to soar to new highs to end the week.
The Dow Jones Industrial Average finished Friday at 20,269.37, up 96.97 points on the day and 0.99% on the week. The S&P 500 was up 0.81% on the week and 8.23 points on the day, closing at 2,316.10. The NASDAQ was up 18.95 points. It ended the week at 5,734.13, up 1.19%.
The Week Ahead
Tuesday, February 14
Producer Price Index (PPI) (8:30 a.m. ET) – The Producer Price Index measures the average change over time in prices received by domestic producers for the sale of goods and services.
Quicken Loans Home Price Perception Index (HPPI) (10:00 a.m. ET) – Quicken Loans, the nation’s second-largest retail mortgage lender, releases data every month comparing what people think their homes are worth through appraisals. Similar opinions of value often make for smoother purchase and refinance transactions.
Quicken Loans Home Value Index (HVI) (10:00 a.m. ET) – Quicken Loans also releases data on home values, both on the national and regional level. Homeowners can gain a perception of whether values are increasing or decreasing, and get a better idea of where they stand in terms of equity.
Wednesday, February 15
MBA Mortgage Applications (7:00 a.m. ET) – The mortgage applications index measures applications at mortgage lenders. This is a leading indicator for single-family home sales and housing construction.
Consumer Price Index (8:30 a.m. ET) – The consumer price index measures changes based on the price of a fixed basket of goods and services purchased by consumers.
Retail Sales (8:30 a.m. ET) – Retail sales measure total receipts from stores selling merchandise and related services to final consumers. Sales are measured by retail and food service stores. Data is collected from the Monthly Retail Trade Survey conducted by the U.S. Census Bureau.
Industrial Production (9:15 a.m. ET) – The Federal Reserve’s monthly index of industrial production – and the related capacity indexes and capacity utilization rates – covers manufacturing, mining, and electric and gas utilities.
Housing Market Index (10:00 a.m. ET) – The National Association of Home Builders produces a housing market index based on a survey where respondents from the organization are asked to rate the general economy and housing market conditions. The index is a weighted average of separate diffusion indexes, including present sales of new homes, sales of new homes expected in the next six months and traffic of prospective buyers in new homes.
Thursday, February 16
Housing Starts (8:30 a.m. ET) – A housing start is registered when the construction of a new residential building begins. The start of construction is defined as the beginning of excavation of the foundation for the building.
Jobless Claims (8:30 a.m. ET) – New unemployment claims are compiled weekly to show the number of individuals filing for unemployment insurance for the first time. An increasing trend suggests a deteriorating labor market. The four-week moving average of new claims smooths out weekly volatility.
There’s a lot of data coming out this week, so let’s hope that Valentine’s Day love spreads throughout the week. If all this mortgage and economic data isn’t putting you in a great Monday mood, we have all sorts of great home, money and lifestyle content to keep you going. Subscribe to the Zing Blog below!
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