Consumer Sentiment Increased for the Third Straight Month
Confidence among U.S. consumers rose more than projected in November, offering additional support to the biggest part of the economy. It was the third straight month of increases in consumer sentiment.
The Thomson Reuters/University of Michigan preliminary index of consumer sentiment climbed to 64.2 this month, the highest since June, from 60.9 in October. The median estimate of economists surveyed by Bloomberg News called for a reading of 61.5.
U.S. consumers are entering the holiday shopping season with a more optimistic outlook than they had a month ago, largely because of a recent decline in gas prices, according to the widely watched index.
Consumer Sentiment is very key to the housing industry. As consumers feel more confident in their expectations about the economy, they are more likely to finally make the move to purchase their next home.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -54 basis points from last Friday to the prior Friday which moved mortgage rates higher. As we have reported for the past several weeks, bonds have been trading in reaction to what has been going on in Europe and have largely ignored the U.S economic data. Last week certainly followed that trend. Bonds (which include mortgage backed securities) sold off (causing rates to rise) as Greece appointed a new Prime Minister and on news reports that the Italian Prime Minister would step down. This helped to remove some uncertainty from the market place and investors removed some funds from the safe-haven of bonds. On the domestic front, we had a luke-warm 30 year U.S. Treasury auction and Initial Jobless Claims and Consumer Sentiment were much better than expected. These also pressured MBS lower.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
| Date | Economic Release |
| 15-Nov | NY Empire State Manufacturing Idx |
| 15-Nov | Producer Price Index (MoM) |
| 15-Nov | Prod Price Index (YoY) |
| 15-Nov | Prod Price Index ex (MoM) |
| 15-Nov | Prod Price Index ex (YoY) |
| 15-Nov | Retail Sales (MoM) |
| 15-Nov | Retail Sales ex Autos (MoM) |
| 15-Nov | Business Inventories |
| 16-Nov | MBA Mortgage Applications |
| 16-Nov | Consumer Price Index (MoM) |
| 16-Nov | Consumer Price Index (YoY) |
| 16-Nov | Cons Pr Idx Ex (MoM) |
| 16-Nov | Co Price Index Ex (YoY) |
| 16-Nov | Net Long-Term TIC Flows |
| 16-Nov | Total Net TIC Flows |
| 16-Nov | Capacity Utilization |
| 16-Nov | Industrial Production (MoM) |
| 16-Nov | NAHB Housing Market Index |
| 16-Nov | EIA Crude Oil Stocks change |
| 17-Nov | Building Permits (MoM) |
| 17-Nov | Continuing Jobless Claims |
| 17-Nov | Housing Starts (MoM) |
| 17-Nov | Initial Jobless Claims |
| 17-Nov | Ph Fed Manufacturing Survey |
| 18-Nov | Leading Indicators (MoM) |
MICHAEL MCDEVITT 