Stock markets gain nearly 1% on Friday to end the week unchanged – Stocks had a rocky week. They opened down as last Friday’s low fourth quarter GDP number sunk in, some investors were spooked by the travel executive order, and some corporate profits came in lower than expected. Friday’s release of January’s strong job growth and another executive order rolling back some financial regulation in The Dodd Frank Bill sparked a rally and markets increased almost a full percentage point, which made up for all their losses throughout the week.
The DOW Jones Industrial Average closed the week at 20,071.46, down just slightly from last week’s close of 20,093.78. The S&P 500 ended the week at 2,297.42, up slightly from its close of 2,294.69 last week. The NASDAQ closed the week at 5,666.77, almost unchanged from last week’s close of 5,660.78.
U.S. Treasury Bond yields – The 10-year U.S. Treasury Bond closed the week yielding 2.49%, unchanged from 2.49% last Friday. The 30-year Treasury Bond yield closed the week at 3.11%, up from 3.06% last week. Mortgage rates follow bond yields, so we watch treasury bonds closely.
Mortgage rates – The Freddie Mac Primary Mortgage Survey released on February 2, 2017 revealed that average mortgage rates from lenders surveyed for the most popular mortgage products were as follows: The 30-year fixed rate average was 4.19%. The 15-year fixed average rate was 3.41% The 5/1 ARM average rate was 3.23%.
Pending home sales show increase – The California Association of Realtors reported that contracts signed to purchase existing (re-sale) homes in California in December rose 1.9% statewide from the number of contracts signed last December. Southern California saw the largest increase, rising 7.8% from last December. Pending sales are an indication of what future closed sales will total. If pending sales pull through to closing we see strong numbers 30 to 60 days later.