Capital Markets Update

By Louis S. Barnes                                   Friday, September 19, 2014

Mortgage interest rates improved slightly this past week as the Federal Reserve Bank left the Fed Funds rate unchanged at the conclusion of its FOMC meeting. The language of the FOMC statement was left unchanged as well indicating that it will leave the Fed Funds rate at its current level for a considerable time. Economic data was mixed. Economic data stronger than expected included the Fed New York Empire State Manufacturing Index, the Q2 Current Account Balance, the September NAHB Housing Market Index, and weekly jobless claims. Economic data weaker than expected included August Industrial Production, August Capacity Utilization, August Housing Starts, August Building Permits, the September Philadelphia Fed Business Index, and August Leading Economic Indicators. Industrial Production had its first decline in seven months. Inflation data was tame with both the Producer Price Index (PPI) and the Consumer Price Index (CPI) up less than 2.0% on a year over year basis. In China, the central bank will add more stimulus to its five largest banks to increase economic growth.

The Dow Jones Industrial Average is currently at 17,301, up over 300 points on the week. The crude oil spot price is currently at $91.98 per barrel, down slightly on the week. The Dollar strengthened versus the Euro and Yen on the week.

Next week look toward Monday’s Existing Home Sales, Wednesday’s New Home Sales, Thursday’s Durable Goods Orders and Jobless Claims, and Friday’s final look at Q2 GDP and Consumer Sentiment Index as potential market moving events.