After a relatively slow economic report week, the calendar picks up again during the week ahead. On Wednesday, we'll see more news about the labor market when the ADP National Employment Report is released with new data on the employment front. Then on Thursday, we'll see another round of Initial Jobless Claims. After last week's increase in new unemployment claims, you can bet the markets will be waiting to see how this report comes in.
Wednesday brings an update on the all-important topic of inflation when the Consumer Price Index is released. The Fed still officially feels that inflation is not a present concern - but some Fed members have expressed their opinions that upcoming monetary decisions should be made with a "data-dependent" eye. This means that the upcoming data - like the Consumer Price Index - will be analyzed very carefully.
We'll also see updates on the manufacturing sector of the economy, with reports on Industrial Production and Capacity Utilization as well as the Philadelphia Fed Index on Thursday.
Finally, Friday brings another dose of news on the health of the housing industry, with reports on the number of Housing Starts and Building Permits recorded during March.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
As you can see in the chart below, there has been a great deal of volatility in the market of late - and particularly with the Fed having exited their buying program, the wild ride isn't likely going to be over anytime soon. If you have any questions about home loan rates - and the volatility seen over the past several weeks, just give me a call or send me an email. I'm always glad to hear from you!
Chart: Fannie Mae 4.5% Mortgage Bond (Friday Apr 09, 2010)