The CML Close - Stocks down, Fed dovish, retail is still strong, mortgage applications are drying up - 08-17-2022
Markets
Stocks fell and Fed minutes read more dovish than hawkish according to some market observers.
Retail sales excluding automobiles came in higher than expected while the MBA Mortgage Market Index is now near a 25-year low.
| • SPX | 4,274.04 | -31.16 | (-0.72%) |
| • NASD | 12,938.12 | -164.43 | (-1.25%) |
| • DJIA | 33,980.32 | -171.69 | (-0.50%) |
| • R2K | 1,987.31 | -33.22 | (-1.64%) |
| • VIX | 19.90 | +0.21 | (+1.07%) |
| • Oil | 87.93 | +1.40 | (+1.62%) |
• Fed minutes were a bit more dovish than anticipated, signaling rate hikes and then a possible pause.
• Retail sales came in below estimates at 0% month over month versus expectations for +0.1%, but retail sales excluding automobiles did come in stronger than estimates.
• Applications for a mortgage to purchase a home dropped coming in 18% below last year's number for this week.
• The MBA Mortgage Market Index is now near a 25-year low.
• Prospective buyers traffic portion of NAHB homebuilder sentiment dropped to its lowest level on record other than the start of COVID.
Headlines of the Day
Stocks Drop Despite Dovish Fed Minutes
Stocks finished lower Wednesday even after the release of “dovish” minutes from the latest Federal Reserve meeting.
Fed Plans More Rate Hikes. Then It Sees a Potential Pause
FOMC members suggested it likely would be appropriate to slow tightening to assess the impact of policy changes on inflation.
Retail sales little changed in July amid fall in gas prices and drop in auto sales
Retail sales for July were flat, compared with the estimate for a 0.1% gain. Excluding autos, sales increased 0.4% against expectations for no gain. Falling fuel prices held back receipts at gas stations, while consumers took those savings and spent at other retailers.
Chipmakers Are Flashing More Warnings on the Global Economy
Korean trade may be headed for slump as memory sales weaken. Global trade has correlated with Korean exports for some time.
UK Inflation Hits Double Digits for the First Time in 40 Years
Consumer prices rose 10.1% from a year ago, more than expected. Inflationary pressure moves beyond energy into food costs.
Economic Data Results for 8-17-2022
U.S. Retail Sales
Retail sales in the US unexpectedly stalled in July of 2022, disappointing markets that expected a 0.1% increase as sales fell at gasoline stations and car dealers. Excluding automobiles, gasoline, building materials and food services, the so-called core retail sales rose 0.8%.
United States MBA Purchase Index
Applications for a mortgage to purchase a home dropped 0.8% for the week ended August 12th, and were 18% lower than the same week one year ago, data from the MBA showed.
United States MBA Mortgage Market Index
MBA Mortgage Market Index in the United States fell 2.3% to 273.3 points in the week ending August 12th, dragged down by a 5.4% drop in the refinancing index and a 0.8% decrease in the purchase one.
Prospective buyers traffic portion of NAHB homebuilder sentiment
Prospective buyers traffic portion of NAHB homebuilder sentiment dropped to its lowest level on record other than the start of COVID.
Economic Data Due Tomorrow on 8-18-2022
Initial Jobless Claims 13/AUG
Continuing Jobless Claims 06/AUG
Jobless Claims 4-week Average 13/AUG
Existing Home Sales JUL
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