Economic Update for the week ending October 29, 2022

Stock markets had another winning week – Stock markets climbed again this week, with the Dow hitting a 2-month high. Although there was no let-up in inflation, third quarter corporate earnings were stronger than expected in almost all sectors besides technology. The third quarter GDP came in stronger than expected. The economy grew at a 2.6% annual rate, rebounding from a weak first and second quarter. The Dow Jones Industrial Average closed the week at 32,861.80, up 5.7% from 31,082.56 last week. It is down 9.6% year-to-date. The S&P 500 closed the week at 3,901.06, up 4% from 3,752.85 last week. The S&P is down 18% year-to-date. The NASDAQ closed the week at 11,102.45, up 2.3% from 10,859.72 last week. It is down 29% year-to-date.

U.S. Treasury bond yields – The 10-year treasury bond closed the week, yielding 4.02%, down from 4.33% last week. The 30-year treasury bond yield ended the week at 4.15%, down from 4.21% last week. We watch bond yields because mortgage rates often follow treasury bond yields.

Mortgage rates – The 30-year topped 7%, it’s highest level since 2002.The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of October 27, 2022, were as follows: The 30-year fixed mortgage rate was 7.08%, up from 6.94% last week. The 15-year fixed was 6.36%, up from 6.23% last week. The 5-year ARM was 5.96%, up from 5.81% last week.