Forecast for the Week  
The see-sawing motion between Stocks and Bonds will likely be seen during the coming week, as there is plenty of action ahead. After last week’s look at the new construction piece of the housing market, we’ll get more information on housing this week with Tuesday’s Existing Home Sales Report and Wednesday’s New Home Sales Report.

Also on Wednesday we will get an update on consumer and business consumption and buying behavior via the Durable Goods Report, which shows data on items that are non-disposable, such as cars, furniture, appliances, games, cameras, business equipment, etc. Thursday brings a read on the economy with the Gross Domestic Product (GDP) Report, which is the broadest measure of economic activity. Also on Thursday is the weekly Initial Jobless Claims report. Last week’s report showed that continuing claims fell by 148,000 to 6.69 million, which is the largest one-week drop since November of 2001. Jobs are vital to the economy strengthening, so it will be important to see what this week’s report indicates.

This week we also have the Fed’s next regularly scheduled Federal Open Market Committee meeting, followed by their Policy Statement and Interest Rate Decision coming on Wednesday afternoon. It will be important to hear the Fed’s comments on the economy and inflation. And speaking of the Fed and inflation, the Fed’s favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) index found within the Personal Income Report, will be released on Friday.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds were unable to maintain the gains they made earlier in the week. I’ll be watching closely to see what impact this week’s news, including additional supply of Bonds hitting the market, will have on Bonds and home loan rates.

Patrick Dunn, Westwood Mortgage Inc. & MMG Weekly
patrick@westwoodmortgage.com / http://www.certifiedplanning.com

This entry was posted on Monday, June 22nd, 2009 at 6:27 pm and is filed under Monday Mortgage Update, Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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