Daily Commentary by Larry Baer: Retail sales
posted a very solid 1.1% gain in September following an upwardly revised 1.2%
surge in August. Sales were lead by
electronic stores because of huge demand for the new iPhone 5. Sales at grocery stores also jumped as food
prices rose. Mortgage investors have
discounted to a large degree this morning's otherwise mortgage interest rate
unfriendly news because much of the spending appears to have come out of
consumers' savings accounts as income growth remains very modest. This makes the sustainability of the growth
in the retail sales highly questionable.
Looking ahead to the
balance of the week - tomorrow's September Consumer Price Index statistics and
Friday's September Existing home sales numbers will highlight an otherwise
sparsely populated economic calendar.
All three of these major releases are expected to be mortgage interest
rate neutral.
The
"wildcard" for the upcoming five day trading session will be
Thursday's weekly jobless claims report.
Analysts currently expect jobless claims will post a gain of 26,000 or
so for the week ending 10/13 - largely giving back most, if not all of last
week's big decline. If so, the data will
tend to be supportive of steady to perhaps fractionally lower mortgage interest
rates. In the unlikely event the jobless
claims numbers remain unchanged or show a further decline from the prior week -
look for mortgage investors to respond by pushing mortgage interest rates
higher from current levels.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
