Entering text into the input field will update the search result below

Weekly Indicators: Long-Term Forecast Remains Neutral Edition

Hale Stewart profile picture
Hale Stewart

By New Deal Democrat

June data included a flat CPI, and a very slight increase in PPI. Industrial production was positive, but retail sales were negative. Preliminary consumer sentiment by the University of Michigan declined.

May data included a weakly positive Labor Market Conditions Index, and a mixed JOLTS report. Wholesale and overall business inventories increased. Overall business sales declined.

My usual note: I look at the high frequency weekly indicators because while they can be very noisy, they provide a good Now-cast of the economy, and will telegraph the maintenance or change in the economy well before monthly or quarterly data is available. They are also an excellent way to "mark your beliefs to market."

In general, I go in order of long leading indicators, then short leading indicators, then coincident indicators.

Interest rates and credit spreads

  • BAA corporate bond index 4.44% unchanged w/w (12 mo. high 4.90%. 12 mo. low 4.15%)

  • 10-year treasury bonds 2.33% -0.06% w/w

  • Credit spread 2.11% +0.06% w/w

Yield curve, 10 year minus 2 year:

  • 0.98%, up +0.06% w/w

30-year conventional mortgage rate

  • 4.06%, down -0.07% w/w (1-year high was 4.39%)

Yields on treasuries and mortgage rates made new 12-month highs in December, but subsequently retreated, turning neutral for several months, before rising enough again to score negative for the last two weeks. Corporate bonds remain neutral. Spreads remain very positive. The yield curve became more positive, primarily due to increasing longer-term bond rates.


Mortgage applications

  • Purchase applications down -3% w/w

  • Purchase applications up +3% YoY

  • Refinance applications down -13% w/w

Real Estate loans

  • Down -0.1% w/w

  • Up +4.5% YoY

Mortgage applications turned outright negative for three weeks before tipping back to neutral and then surprisingly positive for most weeks in the last few months, including this week. Refi applications remain near multi-year

This article was written by

Hale Stewart profile picture
Hale Stewart spent 5 years as a bond broker in the late 1990s before returning to law school in the early 2000s. He is currently a tax lawyer in Houston, Texas. He has an LLM in domestic and international taxation (MagnaCumLaude). He is the author of the book The Lifetime Income Security Solution. Follow me on Twitter at @originalbonddadYou can read his legal analysis on his law office's blog.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.