The National Debt is currently: $17,582,052,685,587.00 is higher by about 12 BILLION. I post this so we will be aware of what we are leaving the next generation.
Markets are closed today due to Good Friday. I hope you have a great weekend and a Happy Easter however you choose to celebrate it. Eggs from a rabbit anyone???
The Dow last traded at 16,408 about 380 pts. higher than where it was last Friday. The S&P 500 is trading at 1,864. Gold is trading at $1,294 an ounce, while oil futures at $104.59 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.80/Gal.
Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 103.95 about .75 worse than where we were last Friday at this time. Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate. The higher the number (price), the better the rate.
In economic news this week; The reader’s digest version is the economy is limping along but at least moving in a positive direction. The new Fed Chairwoman is calling current growth “modest to moderate.” Retail sales and inflation rose but very slightly. Manufacturing sees to be picking up a bit, and new home construction is on the rise.
Retail sales rose 1.1% in March, indicating that the economy is moving in a positive direction after the cold winter. The report, which shows the largest gain for sales since September 2012, adds to the perception that the economy has taken a turn for the better. But it will take several months to know for sure whether this strong spending can be sustained. Excluding a 3.1% rise in auto sales, retail sales rose 0.7%, the fastest pace since February of last year. Excluding the 1.3% drop in gasoline-station sales, retail sales rose 1.4%, the biggest rise since March 2010. Excluding both autos and gas, sales rose 1%, still the fastest pace since February 2012.
Consumer prices rose slightly 0.2% in March after a 0.1% gain in February, pushed up by higher costs for shelter and food. Excluding volatile food and energy prices, so-called core prices ticked up 0.2%. On a three- and six-month basis, prices are creeping higher, which is something to keep an eye on, but with wage growth still modest and lots of retail competition, inflation should remain in check for now.
Industrial production grew 0.7%, in March, and February’s data was revised higher to show the biggest monthly advance since May 2010, according to data released by the Fed. The gains mean that production grew an annualized 4.4% in the first quarter. Capacity utilization rose in March to 79.2% from an upwardly revised 78.8% in February.
A reading of manufacturing sentiment in the Philadelphia region improved in April, contradicting a disappointing regional index from the New York Fed released earlier in the week. The Philadelphia Fed’s manufacturing index rose to a reading of 16.6 in April from 9.0 in March, much stronger than a forecast of 10.0. It is the strongest reading since last September. Any reading above zero indicated expansion. The index has improved markedly from a negative 6.3 reading in February that was blamed on severe winter weather. The components of the report were mostly positive.
The Empire State manufacturing index, the first of the many regional manufacturing gauges to be released, slipped to 1.3 in April from 5.6 in March, the New York Fed reported. Any reading above zero indicates improving conditions.
Economic activity increased in most of the country as the weather improved, particularly in the snow-ravaged northeast, according to summary of economic conditions published by the Fed. The Beige Book, a collection of reports about the economy, said 10 of its 12 districts saw improvement, mostly of the “modest to moderate” variety. This summary fits with the view of most private-sector economites that activity has rebounded as weather has returned to normal.
Our newest Fed Chairwoman Janet Yellen stated that a strong economy with full employment and stable prices is “tantalizingly” on the horizon. In a speech to the Economic Club of New York, Yellen noted that the central bankers and many economites see a return to full employment and stable prices by the end of 2016. This would be the strongest economy in a decade. “I find this baseline outlook quite plausible,” Yellen said. Read full text of her address. She quickly added that the forecast is still two years away, showing “how far we have to go.” She also stated, “The recovery still feels like a recession to many Americans.” Why? Long-term, joblessness remains high, and quitting is still below pre-recession levels, signaling that many workers are unwilling to trade some job stability and security to advance their careers.
The overall tone of Yellen’s first major public remarks since assuming the helm of the FOMC was broadly in line with recent Fed rhetoric. Yellen is considered to be “dovish” on the monetary policy stance (meaning; promoting monetary policies that involve the maintenance of low interest rates, believing that inflation will have a minimal impact on society. It’s derived from the docile and placid nature of the bird of the same name, and is the opposite of the term “hawk”), but she’s upbeat on the economic growth and inflation outlook. The main message continues to be that the Fed remains committed to providing a helping hand to the economic recovery, while becoming more confident in the ability of the recovery to finally achieve liftoff later this year. See Rant on my blog a little later regarding the Fed and their “stimulus” policies.
On the Real Estate front: Construction on new homes in March hit the fastest pace in three months (which still isn’t much), led by single-family homes. Home-construction starts rose 2.8% as they rebounded from a tough winter. Despite March’s gain, the starts rate was down 5.9% from the year-earlier period, the widest annual contraction since April 2011.
Echoing the construction of new homes, a report earlier this week showed confidence among builders in the market for newly built, single-family homes edged up slightly this month to a reading of 47 from 46 in March, according to the National Association of Home Builders/Wells Fargo housing market index. The index has now held below 50 for three straight months. Any number over 50 indicates that more builders view conditions as good than poor. The HMI index gauging current sales conditions in April held steady at 51 while the component gauging traffic of prospective buyers was also unchanged at 32, the NAHB said. The component measuring expectations for future sales rose four points to 57.
On the Employment front: The number of people applying for unemployment-insurance benefits is sticking close to the lowest level since 2007, signaling that employers are maintaining a slow pace of layoffs. The Labor Department reported that initial claims for unemployment-insurance benefits reached 304,000 last week. That tally is up 2,000 from 302,000 in the prior week, which was the lowest level since September 2007.
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