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Events
This Week:
Retail Sales
Down
Inflation
Low
Sentiment
Dropped
Manufacturing
Fell
Events
Next Week:
Tues
7/20
Housing Starts
Thur 7/22
Existing Sales
Leading Indicators
Treasury Announce.
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Slow
Growth, Low Rates
Weaker
than expected economic data and continued low inflation helped mortgage
rates move a little lower from last week. In recent weeks, investors have
modified their consensus outlook to reflect weaker economic growth during
the second half of the year. The manufacturing and retail sales data
released during the week reinforced this view. Lending further support, the
Fed revised its forecast for 2010 economic growth lower as well. Meanwhile,
this week's CPI and PPI data continued to show that inflation is not a
concern in the short term. Uncertainty about the pace of the economic
recovery has made investors willing to purchase safer assets such as government
guaranteed mortgage-backed securities (MBS) at these relatively low yields.
Congress
passed the comprehensive Financial Regulations bill and President Obama
will sign it into law soon. The bill provides a framework for oversight of
the financial services industry, and certain aspects of the bill will
affect mortgage lending and the home buying process. The bill calls for
various regulatory agencies, some of which will be newly created, to
determine the details. Implementation of most of the new mortgage-related
rules is expected to take 18 to 24 months to complete.
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Also Notable:
- June Core CPI inflation increased at a very low
0.9% annual rate
- Weekly Jobless Claims dropped to the lowest level
since August 2008
- The debt of Portugal was downgraded by a major
credit rating agency
- Bernanke stated that increasing credit to small
businesses is "crucial" to the economic recovery
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Average
30 yr fixed rate:
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Last
week:
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-0.02%
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This week:
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-0.05%
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Stocks
(weekly):
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Dow:
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10,200
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+100
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NASDAQ:
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2,200
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+25
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Week
Ahead
A light
Economic Calendar next week will focus mainly on Housing data. Housing
Starts will be released on Tuesday. Existing Home Sales and Leading
Indicators will come out on Thursday. Also on Thursday, the Treasury will
announce the size of upcoming auctions.
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