Forecast for the Week courtesy of Courtesy of Joe Nattans, Branch Manager of GMH Mortgage, LLC: Multiple high-impact reports will be released this week. Here's what you need to know.

Another busy week is ahead of us, especially with the release of multiple high-impact economic reports, not to mention Treasury Auctions:

  • We start off right away Monday morning with reports on Personal Spending and Personal Income, as well as the Personal Consumption Expenditures (PCE) Index, which is the Fed's favorite gauge of inflation.
  • In addition to seeing new data on consumer spending and income, we'll also see new reads on how consumers feel about the economy. On Tuesday, the Consumer Confidence report will be released, followed by the Consumer Sentiment Index on Friday.
  • Manufacturing will also be in the news this week. On Thursday, we'll see the Chicago PMI, which surveys more than 200 Chicago purchasing managers about the manufacturing industry and is a good indicator of overall economic activity. Then on Friday, we'll see the ISM Index, which is considered the king of all manufacturing indices and the single best snapshot of the factory sector.
  • The housing industry will also be highlighted this week, with the release of Pending Home Sales report on Wednesday.
  • Finally, on Thursday the markets will see a new read on the weekly Initial Jobless Claims report. In last week's report, the number of new Jobless Claims rose significantly to come in higher than expected. Overall, the pain in the job market continues to weigh on the economy and the quandary for the Fed is that further government stimulus or support may be warranted if things slow down further. But with more government stimulus comes further inflation fears - and since inflation is the archenemy of Bonds and home loan rates, this will be an important news story to keep watching.

In addition to those reports, the Bonds and home loan rates may also be impacted by the Treasury Auctions this week. The Treasury Department will auction off a total of $99 Billion in 2-, 5- and 7-Year Notes on Monday, Tuesday, and Wednesday. I will watch those auctions closely to see how they're received and how they impact home loan rates early in the week.

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, Bonds and home loan rates benefited from the news last week. I'll be watching closely to see if the slower economic recovery continues... and how this week's news impacts home loan rates.

economic forecast