Monday, May 6, 2013

Weekly Market Update from Curt and Shannon



May 6, 2013

The Dalpiaz Team

Curt and Shannon

141 S. McCormick Street Suite #107

Prescott, AZ 86303


LO License-#0912851 LO NMLS-#151454

NMLS #243638

Unemployment Rate Falls

Average 30-year fixed rate

Week of 05/03: +0.08%

Week of 04/26: -0.02%


Stocks (Weekly)

Dow: 15,000 +300

NASDAQ: 3,375 +100


Pending Home Sales Increased to the Highest Level Since April 2010.

Weekly Jobless Claims Fell to the Lowest Level Since January 2008.

As Expected, The European Central Bank (ECB) Cut Rates by 25 Basis Points.

Eurozone Unemployment Rose to a Record High of 12.1%.


During a week packed full of major economic news, the big market mover was Friday's stronger than expected Employment report, and mortgage rates ended the week higher. Last week's Fed and ECB meeting announcements produced some volatility but had little net impact.

Following a dismal March Employment report and weaker than expected first quarter GDP data, investors were concerned about another spring slowdown for the US economy. The April Employment report helped alleviate those fears, however. Against a consensus forecast of 155K, the economy added 165K jobs in April. The bigger news was that the figures for February and March were revised higher by 114K. With the revisions, the economy added an average of more than 200K jobs per month during the first quarter. The Unemployment Rate unexpectedly declined from 7.6% to 7.5%, the lowest level since December 2008. Without a doubt, the data was significantly stronger than expected, which is good news for the economy. But for mortgage rates, it was bad news for a couple of reasons. It increases future inflation expectations and it moves the Unemployment Rate closer to the 6.5% target which may cause the Fed to scale back its bond purchase program.

The Fed concluded its highly anticipated meeting on Wednesday. Prior to the release of its statement, investors, expecting to see clearer signs of support for an increase in the magnitude or the duration of the bond buying program, pushed up the price of Treasuries and mortgage-backed securities (MBS). The Fed statement was little changed from the last statement, however, causing MBS prices to lose their earlier gains. The Fed will continue asset purchases until the labor market improves "substantially". The primary change to the statement was the addition of the language that the Fed is "prepared to increase or reduce" the pace of its asset purchases based on changes in its outlook for the labor market and inflation.


After a packed week, the Economic Calendar will be nearly barren this week. Thursday's weekly Jobless Claims report will be the only economic data released. There will be Treasury auctions on Tuesday, Wednesday, and Thursday.

MON 05/06

TUE 05/07

WED 05/08

THURS 05/09

FRI 05/10


3-yr Auction

10-yr Auction

Jobless Claims





30-yr Auction














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1220 East 7800 South
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Equal Housing Lender

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