Economic update for the week ending May 28, 2022

Stock markets snapped one of the longest weekly losing streaks on record with their best week since November 2020– Stock markets rallied after a core inflation report showed consumer personal consumption expenditures prices rose 4.9% in April, down from 5.2% in March. Bond yields and mortgage rates have dropped as well over the past couple of weeks as recent reports suggest inflation peaked in March and seems to be moderating. Retail sales also took an unexpected jump showing that the strength of the economy has not subsided. The Dow Jones Industrial Average closed the week at 33,212.60, up 6.2% from 31,261.90 last week. It is down 8.6% year-to-date. The S&P 500 closed the week at 4,158.25, up 6.6% from 3,901.36 last week. The S&P is down 12.8% year-to-date. The NASDAQ closed the week at 12,131.13, up 6.9% from 11,352.62 last week. It is down 22.5% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 2.74% down from 2.78% last week. The 30-year treasury bond yield ended the week at 2.97%, down from 2.99% last week. We watch bond yields because mortgage rates often follow treasury bond yields.

Mortgage rates – Home mortgage rates appear to be stabilizing. The Freddie Mac Primary Mortgage Survey reported that mortgage rates as of May 19, 2022 for the most popular loan products were as follows: The 30-year fixed mortgage rate was 5.10%, down from 5.25% last week. The 15-year fixed was 4.31%, down from 4.43% last week. The 5-year ARM was 4.20%, up from 4.08% last week.