Capital Markets Update

By Louis S. Barnes                                    Friday, December 5, 2014

Mortgage interest rates increased this past week as today’s employment report for November was much stronger than anticipated. November Non-Farm Payrolls increased by 321k on expectations that they would increase by 230k. September and October Non-Farm Payrolls were revised upward as well. Private Payrolls increased by 314k on expectations that they would increase by 225k. Average hourly earnings increased 0.4% on expectations that they would increase by 0.2%. This the biggest jump in earnings since June 2013. The unemployment rate held steady at 5.8%. Other economic data stronger than expected included the November ISM Manufacturing Index, October Construction Spending, November Auto and Truck Sales, and the November ISM Services Sector Index. Economic data weaker than expected included the November ADP Private Jobs estimate, Q3 Productivity, Q3 Unit Labor Costs, the October U.S. Trade Deficit, and October Factory Orders. In Europe, the European Central Bank left their benchmark rate unchanged and will reassess additional stimulus next quarter. In China, manufacturing activity fell to its lowest level since March.

The Dow Jones Industrial Average is currently at 17,950, up over 100 points on the week. The crude oil spot price is currently $65.41 per barrel, down over $1 per barrel on the week. The Dollar strengthened versus the Euro and Yen on the week.

Next week look toward Thursday’s Jobless Claims and Retail Sales and Friday’s Producer Price Index (PPI) and Consumer Sentiment index as potential market moving events.