All Eyes on Corporate Profits

Mortgage rates have retreated off of their steady climb that took place over the last couple of weeks.  Interest rates had risen approximately ¼%, but they seem to have stabilized for the moment.  The financing lull from the holidays, which saw mortgage applications for both purchases and refinances drop 14.8% and 23.3% respectively, turned around for the first week of the year.  Purchase applications jumped 10% and refinance apps rose 12%.

The week had minimal market moving news keeping the stock market trading in a narrow range.  Through end of the trading day, Thursday, the Dow was up a total of 100 points and was poised to remain somewhat flat for Friday morning.

The focus now has turned from the fiscal cliff to corporate profits.  Earnings season, as it is called, began this week.  Major corporations are releasing their 4^th quarter profits and investors are waiting and listening.  Thus far there have been no major surprises in the profit reports released which has been reflected in the relatively minimal movement in the markets.

The Consumer Financial Protection Bureau released their new proposed rules relating to mortgage lending. As expected when a new rule or law is written, everyone will find a problem with it, except the people who wrote it. 

Both consumer groups and various mortgage lending organizations have all come out saying the rules are detrimental to their side.  Consumer groups say the lenders are getting more protection and lenders are saying it will be harder for them to lend.  Attorneys, industry experts, analysts, mortgage company owners and loan officers are all looking at this new proposed regulation and everyone is trying to figure out how this will impact them.  The release is only about 24 hours old and the new rule is not slated to go into effect until January 10, 2014, so there is still time for things to be modified.

All hopes were that the job market improvement trend would continue; however, we hit a bump in the road for the first week of 2013.  First time jobless claims were expected to decline but instead increased by 4000 to 371,000.  This continues the trend of claims remaining higher than what is needed for a real recovery in employment to take hold.

It is a new year, but the nonsense on Capitol Hill continues.  Congress has a lot to do when it comes to the budget and yet they are still not making this a priority.  They have less than two months to come up with a budget and I can guarantee that it will come down to the last minute deal being thrown together.

Next week housing and inflation are the major reports in focus.

• Tuesday January 15^th - Retail Sales and Producer Price Index
• Wednesday January 16^th - MBA Applications, Consumer Price Index, Housing Market Index
• Thursday January 17^th - First Time Jobless Claims and Housing Starts
• Friday January 18^th – Consumer Sentiment

I appreciate your business and look forward to talking to you soon! Have a great day!!!
 

Sincerely,

Cindy Tomlinson
Loan Officer

USLending Company

DRE Lic # 01520422
NMLS # 214851   

 

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