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Thursday: Jobless Claims Down, Economy Picks Up - Housing Drags Yields - Last Updated Thu, Sep 27, 2007 at 11:59 PM EST - by Rob Hain Jobless Claims Drop
First-time Jobless Claims fell last week, contrary to what most analysts had expected. It was the lowest reading for initial claims in four months. The four-week moving average fell 9,750 to 311,500, easing some concerns about the job market.
Economy Perks Up
The final second quarter GDP results showed a rather quick 3.8% annual growth rate for the economy. Though less than the previous estimate of 4%, the revision represents a significant upside indicator for economic conditions. Changes to imports were primarily responsible for the downward revision to GDP.
New Home Sales Fall
Thursday's report on New Home Sales reflected an 8.3% drop in purchases to an annual rate of 795,000 homes It is the largest decline since 1970 and the lowest level in seven years. While much of the economy looks healthy, housing remains a drag, and analysts do not expect to see recovery soon.
Five-Year Auction Draws Strong Demand - Yields Slip
Thursday's five-year Treasury auction drew solid demand, lifting prices and lowering yields. Some had been concerned that worldwide demand for US debt had softened. The auction results, combined with overall soft sentiment about the economy, pushed MBS and Treasury prices higher, taking yields down. By the end of trading, the 10-year Treasury yield was down to 4.57%.
The next release will be Personal Income and Spending and Core PCE at 8:30 Eastern on Friday.
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| Wednesday: Durables Decline, Yields Down - Last Updated Wed, Sep 26, 2007 at 11:59 PM EST - by Rob Hain Durable Goods Orders Fall
Wednesday's report on Durable Goods Orders was expected to show a decline of about 3.5% in August, but the results were even lower - a 4.9% drop in durable goods orders overall. Without transportation equipment, which tend to sway the results widely, orders fell 1.8%. The report is a popular gauge of business sentiment, the thinking being that businesses will invest in durable goods only when their outlook is positive. Wednesday's report reflected the largest decline in orders in seven months.
Yields Slip
The soft economic news, combined with strong interest in the 2-year Treasury auction, pushed MBS and Treasury prices up on Wednesday, lowering yields. After opening higher, the 10-year Treasury yield was down to 4.62% by the end of the day - even with the previous day's close.
The next releases will be Weekly Jobless Claims and the final revision to second-quarter GDP at 8:30 Eastern on Thursday.
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| This Week: Plenty of Data Due - Last Updated Fri, Sep 21, 2007 at 11:59 PM EST - by Rob Hain Tuesday
Consumer Confidence and Existing Home Slaes are due at 10:00 Eastern.
Wednesday
Durable Goods Orders are due out at 8:30 Eastern.
Thursday
Weekly Jobless Claims are due out at their usual 8:30 Eastern time, along with final revisions to second quarter GDP. New Home Sales follow at 10:00.
Friday
Personal Income and Spending is due out at 8:30 Eastern. At the same time, monthly Core PCE figures should be released, followed by the Chicago PMI at 9:45. Construction Spending and Consumer Sentiment finish the data week at 10:00.
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| Last Week: 10-year Treasury Up Seventeen Basis Points - Last Updated Fri, Sep 21, 2007 at 11:59 PM EST - by Rob Hain During the heavy economic news week of September 17, the 10-year Treasury yield jumped seventeen basis points, ending the week at 4.63%.
Monday
New York manufacturing missed estimates. 10TSY close: 4.47%
Tuesday
The FOMC lowered the Fed Funds Target Rate by 50 basis points. Energy prices pulled producer prices down significantly; core prices rose. 10TSY close: 4.48%
Wednesday
As with producer prices, consumer prices slid overall, but core prices rose. Housing Starts slipped. 10TSY close: 4.52%
Thursday
Jobless Claims dropped slightly. Leading Indicators declined unexpectedly, but Philadelphia manufacturing soared. 10TSY close: 4.67%
Friday
No economic data was released. 10TSY close: 4.63%
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