Capital Markets Update

By Louis S. Barnes                                    Friday, January 30, 2015

Mortgage interest rates improved this past week on the Fed’s FOMC announcement which indicated that the Fed would be patient with any rate increase. The Fed will take into account labor conditions, inflation and inflation expectations, and global economic developments. With the global economy slowing, the Fed rate increase may be farther off than expected. Economic data was mixed. Economic data stronger than expected included January Consumer Confidence, December New Home Sales, weekly jobless claims, the Q4 Employment Cost Index, and the Chicago Purchasing Managers Index. Economic data weaker than expected included December Durable Goods Orders, NAR Pending Home Sales, and the first look at Q4 GDP. The Treasury auctioned $90 billion in 2 Year Notes, 5 Year Notes, and 7 Year Notes which were met with reasonably strong demand. In Europe, consumer prices fell 0.6% from January 2014, the largest drop since July 2009. In Greece’s elections, the Syriza Party won. This was a rejection of EU austerity measures which calls into question whether Greece will stay in the EU.

The Dow Jones Industrial Average is currently at 17,284, down almost 400 points on the week. The crude oil spot price is currently at $45.16 per barrel, down slightly on the week. The Dollar weakened versus the Euro and Yen on the week.

Next week look toward Monday’s Personal Income and Outlays and ISM Manufacturing Index, Wednesday’s ISM Services Sector Index, Thursday’s International Trade and Jobless Claims, and Friday’s employment report for January as potential market moving events.