US Nonfarm Payrolls Rise, Jerome Powell Emphasizes Inflation Control, MBA Reports Decline in Mortgage Applications: Portafolio Capital Markets Recap for Week Ending 7/5/2024
Nonfarm Payrolls
The U.S. Bureau of Labor Statistics reported that nonfarm payroll employment increased by 206,000 in June (better than the 200,000 Dow Jones forecast). Despite this, the unemployment rate rose steadily to 4.1%. Notable job gains were seen in government, healthcare, social assistance, and construction sectors. However, the number of long-term unemployed individuals rose to 1.5 million.
You can read the entire Employment Situation Summary by the US Bureau of Labor Statistics here.
-
At the recent ECB Forum on Central Banking, Federal Reserve Chair Jerome Powell, ECB President Christine Lagarde, and Central Bank of Brazil Governor Roberto Campos Neto provided crucial insights into their respective stance in monetary policy and economic outlooks. Regarding the US, we’ll highlight some points below.
Inflation and Monetary Policy
Powell highlighted the progress made in controlling inflation in the U.S. but emphasized the need for a cautious approach moving forward.
Economic Growth and Labor Markets
The panel addressed regional economic challenges, with Powell noting signs of a slowing labor market in the U.S., which could influence future policy decisions.
Overall, the discussion underscored the importance of adaptive and vigilant policy measures to ensure economic stability and growth across different regions.
You can watch segments of the ECB Forum on Central Banking here.
The Mortgage Bankers Association (MBA) reported a 2.6 percent decrease in mortgage applications for the week ending June 28, 2024. Key points included:
Market Composite Index: Decreased 2.6 percent seasonally adjusted, increased 8 percent unadjusted from the previous week.
Refinance Index: Decreased 2 percent from the previous week but was 29 percent higher than the same week a year ago.
Purchase Index: Decreased 3 percent seasonally adjusted, increased 7 percent unadjusted from the previous week but was 12 percent lower than the same week a year ago.
Mortgage Rates: Rates for various mortgage types increased, with 30-year fixed-rate mortgages surpassing 7 percent.
Mike Fratantoni, MBA’s SVP and Chief Economist, noted that despite higher mortgage rates, market expectations for a Fed rate cut later this year remain. He highlighted a decrease in purchase applications and subdued refinance activity, despite a slight increase in conventional refinance loan applications.
Refinance Share: Increased to 35.7 percent of total applications from 35.1 percent the previous week.
ARM Share: Decreased to 6.0 percent of total applications.
FHA Share: Remained unchanged at 13.1 percent.
VA Share: Decreased to 12.9 percent from 13.8 percent.
USDA Share: Decreased to 0.3 percent from 0.4 percent.
Interest rates for various mortgage types increased:
30-Year Fixed-Rate (Conforming): Increased to 7.03 percent from 6.93 percent.
30-Year Fixed-Rate (Jumbo): Increased to 7.11 percent from 7.04 percent.
30-Year Fixed-Rate (FHA): Increased to 6.90 percent from 6.82 percent.
15-Year Fixed-Rate: Increased to 6.56 percent from 6.46 percent.
5/1 ARMs: Increased to 6.38 percent from 6.29 percent.
The MBA’s Weekly Applications Survey, covering over 75 percent of U.S. retail residential mortgage applications, has been conducted weekly since 1990 and includes responses from mortgage bankers, commercial banks, and thrifts.
The entire weekly survey from the week ended June 28, 2024 can be found here.
www.portafoliocapital.com/subscribe
Portafolio Capital Management is an independent wealth and capital management firm based in San Antonio, Texas. With over 12 years of combined investment and macro-economic analysis experience, our goal is to instill confidence in our investors through how we view markets and our investment approach. As a Registered Investment Advisor (RIA) and fiduciary, we are held to the highest standard when it comes to managing your money and are bound by law to act solely in your best interest.
Learn more about our strategy and management style by scheduling a 15-minute warm meeting at: https://calendly.com/portafoliocapital/15min.
All content is not to be received as financial advice and is for informational purposes only. Each individual should consult with their dedicated financial advisor, tax preparer, estate attorney, etc. before making any financial or investment decisions. Portafolio Capital does not recommend (nor does it make recommendations of) the buying or selling of any securities through any of our published content mediums. We expressly disclaim and do not assume any liability in connection with any inaccuracies in any of the information provided or in connection with information stated. While we do our best to vet thoroughly and provide you with information from reputable resources, not limited to: FRED, Yahoo Finance, CNBC, and company specific investor websites, unfortunately we cannot guarantee the accuracies of such and ask that you do your own due diligence when researching any finance, economics, and earnings information. Furthermore, we do not undertake an obligation to update or revise publicly any information as it changes. Please read our entire legal disclaimer page at portafoliocapital.com/disclosures-and-documents
Chief Investment Officer
