Wednesday, June 8, 2022
Pre-market futures are giving back some of the gains the indices had accrued over the first two trading days of this week. We’ve been kind of coasting on slight data from economic reports and what remains of Q1 earnings season. The Dow is -200 points at this hour, the S&P 500 is -25 and the Nasdaq is -75 points.
All eyes will be on this Friday’s Consumer Price Index (CPI) results, where market participants will be paying close attention especially to year-over-year headline numbers. Last month, we brought in a very high +8.3%, but that at least was lower than the +8.5% CPI growth we saw as of March. Just as importantly, we’ll be looking at he market’s reaction, regardless if the news is very good or somehow less-than.
This morning, Mortgage Applications dropped to a 22-year low -6.5%, following -2.3% last time around. The report further underscores what we were seeing earlier in the year: a bevy of mortgage activity ahead of the Fed raising interest rates back in early March. The Fed was very deliberate and transparent about its direction; home buyers and homeowners looking for a lower rate pulled a ton of business forward, and we see it drying up pretty notably now.
The Purchasing Index dropped -7.1% — a big downshift from the previous read’s -0.6%. Refi activity was also down, but that ball had already begun rolling downhill: -5.6% in today’s report versus -5.4% last time. Thirty-year mortgage rate averages have flattened somewhat: +5.4% versus +5.33% previously — but we expect this to tick higher once more Fed rate hikes are under the belt, including next week’s telegraphed 50 basis point raise.
Finally, we won’t really be finished discussing inflation in the economy — both domestic and global — without talking about oil prices: the WTI and Brent crude spot prices are $120 per barrel and $121 per barrel, respectively. An average gallon of gas in the U.S. is quickly approaching $5, and is already well above that in many of our most-populous states.
Oil prices are currently encroaching on the recent highs, which came in a spike in the late weeks of February, when Russia launched its unprovoked attack against Ukraine. Since then, NATO and much of the West has cut off Russian oil and gas in a wide-scale boycott. There are signs this is having a profound effect on the Russian economy, but for certain it’s had a profound effect on the American consumer.
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Mortgage Apps at 22-Year Lows; 30-Year Rates Flatten
Wednesday, June 8, 2022
Pre-market futures are giving back some of the gains the indices had accrued over the first two trading days of this week. We’ve been kind of coasting on slight data from economic reports and what remains of Q1 earnings season. The Dow is -200 points at this hour, the S&P 500 is -25 and the Nasdaq is -75 points.
All eyes will be on this Friday’s Consumer Price Index (CPI) results, where market participants will be paying close attention especially to year-over-year headline numbers. Last month, we brought in a very high +8.3%, but that at least was lower than the +8.5% CPI growth we saw as of March. Just as importantly, we’ll be looking at he market’s reaction, regardless if the news is very good or somehow less-than.
This morning, Mortgage Applications dropped to a 22-year low -6.5%, following -2.3% last time around. The report further underscores what we were seeing earlier in the year: a bevy of mortgage activity ahead of the Fed raising interest rates back in early March. The Fed was very deliberate and transparent about its direction; home buyers and homeowners looking for a lower rate pulled a ton of business forward, and we see it drying up pretty notably now.
The Purchasing Index dropped -7.1% — a big downshift from the previous read’s -0.6%. Refi activity was also down, but that ball had already begun rolling downhill: -5.6% in today’s report versus -5.4% last time. Thirty-year mortgage rate averages have flattened somewhat: +5.4% versus +5.33% previously — but we expect this to tick higher once more Fed rate hikes are under the belt, including next week’s telegraphed 50 basis point raise.
Finally, we won’t really be finished discussing inflation in the economy — both domestic and global — without talking about oil prices: the WTI and Brent crude spot prices are $120 per barrel and $121 per barrel, respectively. An average gallon of gas in the U.S. is quickly approaching $5, and is already well above that in many of our most-populous states.
Oil prices are currently encroaching on the recent highs, which came in a spike in the late weeks of February, when Russia launched its unprovoked attack against Ukraine. Since then, NATO and much of the West has cut off Russian oil and gas in a wide-scale boycott. There are signs this is having a profound effect on the Russian economy, but for certain it’s had a profound effect on the American consumer.
Questions or comments about this article and/or its author? Click here>>