Market Matters – September 10 , 2021 Edition

September 10, 2021
/ Austin Horseshoe Bay Lakeway Ranches Ranches $1-1.5 Million Texas Texas Coastal Bend Texas Hill Country Texas Lakes and Rivers Texas Ranches For Sale
/ By Michael Brown

While we had a shortened calendar this week, along with not much in the way of upper-tier economic data, it isn’t surprising that the largest market moving event was the 10- and 30-year treasury auctions. While last week’s poor jobs number most likely puts a September taper announcement off the table, we have CPI data next Tuesday that will need to be watched closely. There have been quite a few Fed governors who have been quoted saying they are wanting to start tapering by the end of the year. Stronger jobs numbers and hotter inflation data will give those members a better case to start the tapering of the Fed’s asset purchases sooner.

Initial Jobless Claims

Initial Jobless Claims declined by -35k to 310k for the week ending September 3rd vs. the prior week’s revised count of 345k (orig. 340k). Claims are now at their lowest level since the March 14, 2020 week, with the latest 4-week moving average at 339.5k, down from a prior 356.3k. Continuing claims, which lag by a week, were down -22k to 2.783mln from the prior week’s revised count of 2.805mln (orig. 2.748mln).

JOLTS Report

The JOLTS report for July showed the number of job openings increased to 10.9mln according to the BLS. Hires and total separations were mostly unchanged at 6.7mln and 5.8mln, respectively. Within separations, the quits rate was unchanged at 2.7%, while the layoffs and discharges rate was also little changed at 1.0%. Over the 12 months ending in July, hires totaled 72.6mln and separations totaled 65.6mln, resulting in a net employment gain of 7mln. Again, these totals do include those workers who may have been hired and separated more than one time during the year.

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Employment Trends Index

The Conference Board’s Employment Trends Index, a second-tier data release, was up for the sixth consecutive month in August, increasing by +.4%. However, the gain was still at a slower growth rate as the Board stated, “the Delta variants’ impact on economic activity, especially in in-person services.” This month’s increase was the result of improvement seen in 5 out of 8 categories. From largest to smallest – initial claims for unemployment insurance, industrial production, ration of involuntarily part-time to all part-time workers, job openings, and the percentage of those firms with positions not able to fill right now. On the negative side, from largest to smallest – the number of temporary employees, real manufacturing and trade sales, and percentage of those respondents who say they find jobs hard to get.

Weekly Mortgage Applications

The MBA weekly mortgage application index decreased by -1.9% for the week ending September 3rd. Purchase applications declined by -3.0% and were -18% lower than the same week last year. Refinance applications declined -3.0% and were -4.0% lower vs. the same week a year ago. “Mortgage application volume fell last week to its lowest level since mid-July, as mortgage rates have stayed just above 3% for several weeks. Refinance volume has been moderating, while purchase volume continues to be lower than expected given the lack of homes on the market,” said Mike Fratantoni, MBA’s Senior Vice President and Chief Economist. “Economic data has sent mixed signals, with slower job growth but a further drop in the unemployment rate in August. We expect that further improvements will lead to a tapering of Fed MBS purchases by the end of the year, which should put some upward pressure on mortgage rates.”

We feel neutral on the market as the 10-year is at 1.295%. We have resistance at 1.21%, while we have support at 1.32%, then at 1.37%. It isn’t a bad idea to take any rallies as an opportunity to get some loans locked in.

Pam Jamison

Loan Originator

NMLS# 277012

8310-1 N. Capital of Texas Highway, Suite 195, Austin, TX 78731

512-775-1001 | 512-582-8778

pam.jamison@primelending.com |

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