| Stock markets dropped again this week – Concerns about high interest rates continued to cause panic for investors again this week after another round of positive data was released. The third quarter GDP (Gross Domestic Product), the broadest measure about the strength of the economy, unexpectedly jumped. The reading showed that the economy expanded at an annual rate of 4.9% in the third quarter of 2023, up from 2.1% in the second quarter. Surging consumer spending was attributed to much of the increase. This left investors feeling that the Fed has lost control over the economy. The economy, jobs market, and consumer spending have continued to expand despite all of the interest rate hikes and other tightening measures that were supposed to slow the economy. Another report showed that while savings are dropping, there is still $1.2 trillion in Covid stimulus in savings. The PCE, another gauge of inflation that was released on Friday, showed inflation rose in September by the largest month-over-month percentage rate since May. Other news had tech stocks declining early in the week when Alphabet released weaker earnings than expected, but that reversed on Friday when Amazon and Intel beat expectations. Auto stocks also took a hit after Ford announced that they were pulling their future guidance due to the auto worker strike. The Dow Jones Industrial Average closed the week at 32,417.59, down 2.1% from 33,127.29 last week. It is down 2.2% year-to-date. The S&P 500 closed the week at 4,117.37, down 2.6% from 4,224.16 last week. It is up 7.2% year-to-date. The Nasdaq closed the week at 12,634.01.81, down 2.7% from 12,983.81 last week. It is up 20.7% year-to-date.
U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.84%, down from 4.93% last week. The 30-year treasury bond yield ended the week at 5.03%, down from 4.78% last week. We watch bond yields because mortgage rates follow bond yields. Mortgage rates – The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of October 26, 2023, were as follows: The 30-year fixed mortgage rate was 7.79%, up from 7.63% last week. The 15-year fixed was 7.03%, up from 6.92% last week. Have a great weekend! |
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