Hope everyone had a good weekend! Mine went well, although I didn’t do much. Not much happened in stocks last week as they ended the week they started.

As in life, sometimes it’s not where you start or end, but how you get there. Let’s see what drove the markets!

Headline news

As always, this week’s report has been compiled with Econoday assistance.¹ Let’s go!

Producer price index (PPI)

Prices on the production side rose 0.6% in July, showing a marked improvement. Despite this, they are still down 0.4% on the year. However, excluding food and energy prices, they increased 0.5% on the month and 0.3% on the year.

Finally, when commercial services were cut again, producer prices rose 0.3% in July and 0.1% from the same period a year ago. The sharp drop when these were removed is due to the fact that retail and wholesale sales grew by 0.8% per month.

Energy prices rose 5.3% for the month. Meanwhile, the price of food fell 0.5% in July, with many prices falling 8%. Prices for services also rose 0.8%, including a 7.8% increase in portfolio management fees with stronger financial markets.

Finally, there were significant gains in the wholesaling of machinery and vehicles, retail prices of automobiles and trucks, and legal fees.

MBA Mortgage Applications

Like the Freddie Mac Mortgage Rate Survey, the Mortgage Bankers Association survey is a lagging indicator, meaning all data reported in this survey is from the previous week.

Although events have pushed mortgage rates up slightly over the last few trading days, the average rate on a 30-year fixed mortgage fell 8 basis points to 3.06%.

This was in part related to the fact that mortgage loan applications rose 6.8% in the survey, including a 2% increase in purchase requests for a 21.8% year-over-year gain. ‘other. Meanwhile, the refinancing index rose 9.1% for the week.

Consumer Price Index (CPI)

Prices on the consumer side rose 0.6% for the month of July and are now up 1% from the same period a year ago. When food and energy were taken out, the monthly gain is still 0.6%, but the pace of price appreciation is 1.6% for the year. This represents a huge monthly gain.

Reasons for the surge included a 9.3% increase in auto insurance prices and a 3.6% increase in prices from wireless service providers. This goes hand in hand with a 2.3% increase in used vehicle prices, while a 0.8% increase in new vehicles also contributed to the gains.

Airline ticket prices have risen 5.4% as they recover, but remain well below normal. The cost of medical care services increased 0.5% with a 0.7% increase in physician costs and a 0.2% increase in the costs of prescription drugs and hospital services.

To complement the gains, there was a 2.5% increase in energy prices with gas prices rising 5.6%.

One of the areas where a decline was observed was food, where prices fell 0.4%. The price of beef fell 8.2% while the cost of food at home fell 1.1%.

Unemployment benefit claims

Initial jobless claims were down 228,000 to 963,000, the first time they were below 1 million since before the full impact of COVID-19 was felt. Meanwhile, the 4-week moving average of initial claims fell by 86,250 to around 1.253 million.

As for continuous claims, they decreased from 604,000 to 15.486 million. The unemployment rate rose 0.4% to 10.6% last week. Finally, the four-week average of continuous claims decreased by 454,500 to approximately 16.17 million.

Retail sales

Retail sales rose 1.2% in July. Excluding cars and trucks, they increased 1.9%. When cars and gasoline were phased out, the number increased 1.5%, which is the gains of a control group less prone to seasonal fluctuations.

Sales at electronics and appliance stores increased 22.9%. Early-to-school shopping may have boosted sales at clothing stores, which rose 5.7%. There was also a 5% increase in restaurant sales. Finally, non-store retailers like e-commerce and catalogs grew 0.7%

Auto sales fell 1.2%, while gasoline sales rose 6.2% on higher prices.

Industrial production

Overall production increased 3% from July, with manufacturing output up 3.4%. Space use in factories was 70.6%, up 2.1% in July. Production is still 8.4% lower than in February.

Utilities’ output rose 3.3% as people started their air conditioning. Mining also rose 0.8%, the first gain in 5 months.

Consumer sentiment

Consumer sentiment edged up in August, rising 0.3 points to 72.8 overall. This represents a drop of 5 points from what it was in June and a drop of almost 30 points from February before COVID-19 hit.

The gain was rooted in a 0.6 point rise from expectations to 66.5. Meanwhile, consumers are a bit more pessimistic about current conditions as they fell 0.3 points to 82.5. Analysts who published the report speculated that the current decline in conditions was linked to doubts about the introduction of additional government stimulus.

Inflation expectations remained stable at 3% next year and up 0.1% to 2.7% over the next 5 years.

Mortgage rates

Mortgage rates went up last week according to Freddie Mac. However, they’re still less than 3% for a 30-year mortgage, which is incredibly low. If you are ready to begin, feel free to speak with one of our mortgage experts.

The average rate on a 30-year fixed mortgage with 0.8 points of fees paid rose 8 basis points last week to 2.96%. This percentage fell from 3.6% a year ago.

Meanwhile, the average rate on a 15-year fixed mortgage rose a few basis points to 2.46%, with 0.8 points paid. This figure rose from 3.07% last year.

Finally, the average rate of a 5-year cash-indexed variable-rate hybrid mortgage with 0.4 point of fees paid remained unchanged at 2.9%, after declining 3.35% last year. .

stock Exchange

The stock market was pretty flat on Friday. The economic data was mixed. Travel inventories edged up and people are still searching for news on the government’s stimulus measures.

At the same time, some of the biggest speeches of the week were about Apple and Google shot the popular third-person shooter “Fortnite” of their app stores for violating their policies by attempting to make sales outside of the platforms themselves, followed by legal action from the developer.

I mention this only because in an age where everything seems driven by spread and who can reopen and who can’t, it’s quite refreshing to see an old-fashioned battle over competition practices in the revenue context. video games.

The Dow Jones Industrial Average was up 34.3 points on Friday and 1.81% the week following the close at 27,931.02. Meanwhile, the S&P 500 closed at 3372.85, down 0.58 points on the day, but up 0.64% on a weekly basis. Finally, the Nasdaq was up 0.08% on the week despite falling 23.2 points on Friday to close at 11,019.3.

The coming week

Monday August 17th

Housing Market Index (8:15 a.m. ET) – The National Association of Home Builders (NAHB)^®) produces a housing market index based on a survey in which the organization’s respondents are asked to assess the general economy and housing market conditions. The index is a weighted average of separate release indices including current new home sales, expected new home sales over the next 6 months, and traffic from potential new home buyers.

Tuesday August 18

Housing Starts (8:30 a.m. ET) – A housing starts is recorded when construction of a new residential building begins. The start of construction is defined as the start of excavation of the building foundation.

Wednesday August 19

MBA Mortgage Applications (7:00 a.m. ET) – The Mortgage Applications Index measures applications to mortgage lenders. This is a leading indicator of single-family home sales and housing construction.

Thursday August 20

Unemployment Claims (8:30 a.m. ET) – New jobless claims are compiled weekly to show the number of people applying for UI for the first time. An upward trend suggests a deterioration in the labor market. The 4-week moving average of new claims mitigates weekly volatility.

Friday August 21

Existing Home Sales (10 a.m. ET) – Existing home sales are the number of already built homes, condominiums, and co-ops that have been sold during the month. Existing homes (also known as “home resales”) represent a larger share of the market than new homes and indicate housing market trends.

The volume of reports released this week is a bit lower, but we’re getting a lot of key housing data and the sector is a huge economic driver, so that will be something to watch. We’ll have everything covered for your Market Update next week!

If mortgage rates and economic news don’t put you in a good mood this Monday afternoon, we’ve got it. It can be a bit boring. The good news is, we have a lot more home, money, and lifestyle content to share with you if you subscribe to our mailing list below!

I’m looking to take a vacation next week. If you’re in the same boat looking for a late summer getaway, here are some vacation savings tips. Have a good week!

¹ Important legal notice: Econoday has attempted to verify the information contained in this calendar. However, any aspect of this information is subject to change without notice. Econoday does not provide investment advice and does not represent or warrant that the information is accurate or complete at all times. Copyright 2020 Econoday, Inc. All rights reserved.