Weekly Update July 31, 2014

Weekly Update 7/31/14

We end the week with mortgage bonds, and stocks pointing lower. Talks of inflation by the feds, caused the market to react strongly. They stated Inflation is much closer to their target that they have seen, and although they tried to brush it under the carpet, the market read between the lines.

ADP released their employment report for July, and figures were lower than expected. Numbers were anticipated to come in at 235K, but showed a figure of 218K jobs created.

Wednesday, the Advanced 2nd Quarter reading of the GDP was released at 4%, which was stronger than the expected 3.1% figure. This is also an increase from the 1st Quarter readings, which had come in at -2.1%.

Notably this week, we look at the trend between the NYSE Margin Debt and the S&P 500 Real Values. In the past, when margin rate has turned down, stocks have followed suit, and turned down as well. The downward shift could mean that we could see lower interest rates sooner than expected.

Pending home sales figures for June were released, and the numbers have in come in lower than expected. The figures are down 4.5% last year, but we are not seeing much market reaction, and we are coming away from a 6% increase in May.

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