Economic update for the week ending October 30, 2021

Stock markets closed the week at record highs – Stocks rebounded in October as investors were encouraged by a number of factors. Among the most notable was a drop in COVID-19 cases across the country, third quarter corporate profits mostly exceeding expectations, and a proposed increase of the corporate tax rate was removed from the latest spending plan. The Dow Jones Industrial Average closed the week at 35,819.56, up 0.4% from 35,677.02 last week. It is up 16.9% year-to-date. The S&P 500 closed the week at 4,605.38, up 1.3% from 4,544.71, last week. It is up 22.7% year-to-date. The NASDAQ closed the week at 15,498.39, up 2.7% from 15,090.20 last week. It is up 20.3% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 1.55%, down from 1.66% last week. The 30-year treasury bond yield ended the week at 1.93%, down from 2.08% last week. We watch bond yields because mortgage rates often follow treasury bond yields.

Mortgage rates – The October 28, 2021, Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate was 3.14%, up from 3.09% last week. The 15-year fixed was 2.37%, up slightly from 2.33% last week. The 5-year ARM was 2.56%, almost unchanged from 2.54% last week. Rates dropped at the end of the week. The 30-year was close to 3% on Friday.

The October jobs report will be released next Friday. It is widely felt that job gains will rebound from their disappointing levels in August and September. Those numbers will be included in next week’s update.