This past week was filled with so much good news — the biggest of which was the signing of Phase One of the U.S. and China trade pact.
This trade deal is a very positive development for the U.S., China, and the world, and paves the way for future business investment and other trade deals around the globe. This also removed what was a big uncertainty for many months.
The economic data was already amazing with the following reports coming in better than expectations:
- Small Business
- Retail Sales
- Philly Fed Index
- Initial Jobless Claims
And speaking of better than expectations, we also watched the start of corporate earnings season and most of the big banks handily beat expectations.
All of this good news has pushed stocks to all-time highs, but at the same time mortgage bonds and home loan rates remained right at the best levels in three years.
Bottom line: the U.S. economy remains quite strong with little chance of a recession anytime soon. Yet, home loan rates have not moved higher, giving many an incredible opportunity to purchase or refinance a home.
Forecast for the Week
With the U.S.-China Phase One trade pact having been signed this past week, the financial markets will get back to what will drive the trading activity in the days and weeks ahead, earnings season.
A slew of earnings reports will be released this week which will directly impact stocks, bonds, and home loan rates. If the numbers continue to stream in positive, it could push bond prices lower, and rates higher. The opposite is also true.
Economic data will be extremely light with just Existing Home Sales and Weekly Initial Jobless Claims being released, so the focus will be on the earnings data.
All U.S. financial markets are closed on Monday in observance of Martin Luther King Jr. Day.