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Stock markets – Stock markets were relatively flat this week following almost two months of weekly gains. Mortgage rates and bond yields dropped further this week before settling back to last week’s rates and yields following the November Jobs report. It was widely felt that hiring was stalling, and that the unemployment rate was rising from near-historic lows but hiring ticked up in November and the unemployment rate dropped. The Fed is looking to cool the job market because the low unemployment rate is causing a labor shortage. This encourages consumer spending which fuels inflation because when people are not worried about losing their jobs, they spend money. It remains to be seen how the Fed interprets this jobs report, but it’s certainly not something that would cause the Fed to feel the economy was slowing and moving toward a recession. If the Fed felt the economy was slowing, they would need to cut rates from their current 22-year high levels. The Dow Jones Industrial Average closed the week at 36,247.87, almost unchanged from 36,254.50 last week. It is up 9.4% year-to-date. The S&P 500 closed the week at 4,604.37, up 0.2% from 4,594.63 last week. It is up 19.9% year-to-date. Nasdaq closed the week at 14,403.97, up 0.4% from 14,350.03 last week. It is up 37.6% year-to-date. Job growth heated up in November – The Department of Labor and Statistics reported that 199,000 new full-time jobs were added in November, up from 150,000 new jobs in October. The unemployment rate dropped to 3.7% in November, down from 3.9% in October. Average hourly wages increased 4% year-over-year, the smallest year-over-year increase since 2021, yet exceeding the inflation rate. U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 4.22%, unchanged from 4.22% last week. The 30-year treasury bond yield ended the week at 4.41%, almost unchanged from 4.40% 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 December 7, 2023, were as follows: The 30-year fixed mortgage rate was 7.03%, down from 7.22% last week. The 15-year fixed was 6.29%, down from 6.56% last week. Rates were lower at the end of the week. The 30-year dropped under 7% on Friday. Have a great weekend! |
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