Economic update for the week ending May 13, 2017

Stocks mixed this week – It was a very stable week for stocks. Market volatility reached a 24-year low. Investors were encouraged by higher quarterly corporate earnings announcements from many companies, and a rebound in CPI, which surprisingly dropped in March. Also, optimism of pro growth tax reform, and defense and infrastructure spending kept investors optimistic. Markets shrugged off some disappointing news this week like: Falling oil prices, which has caused energy stocks to drop. Oil prices are down 10.8% year-to-date. Some retail companies continue to struggle due to pressure from online retailers. Year-to-date, 9 large retailers have declared bankruptcy, the same amount as all of last year. The dollar strengthened further against most currencies, which could hurt exports in the future. The Dow Jones Industrial Average ended the week at 20,896.71, down from 21,006.94 last week. The S&P 500 closed the week at 2,390.90, down slightly from its close last week of 2,399.29. The NASDAQ closed the week at 6,121.23, up from last week’s close of 6,100.76.

Consumer prices rebound in April – The Labor Department reported that consumer prices rose 0.2% in April. This followed a surprising decline of 0.3% in March, which scared investors. Year over year consumer prices were up 2.2% in April. That is in line with the Fed’s inflation target.

Treasury Bond yields – The 10-year Treasury bond closed the week at 2.33%, down from 2.36% last week. The 30-year treasury yield ended the week at 2.98%, unchanged from 2.99% last week.
Mortgage Rates – The May 11, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.05%, almost unchanged from 4.02% last week. The 15-year fixed was 3.29%, almost unchanged from last week’s 3.27%. The 5-year ARM was 3.14%, also almost unchanged from 3.13% last week.

Foreclosures at lowest level since 2005 – Foreclosure filings dropped 23% from one year ago. The number of homes in default have hit their lowest level since November 2005.

Have a great weekend,