The final GDP report for 2013 was reported today, showing that our economy increased 3.2% from October through December. This was a better than the anticipated increase of 3%, but below the third quarter’s strong 4.1% growth. That was the good news. Pending home sales declined 8.7%, well over the 0.2% decline anticipated. Meaning that there are far fewer homes under contract than everyone would like. Part of that might have to do with the increase in jobless claims: 19,000 more people requested their first unemployment check last week. And you’ve probably heard by now, but yesterday the Fed reduced their bond purchasing by an additional $10,000,000,000 per month, now only spending 65,000,000,000 per month purchasing longer term treasury notes and mortgage backed securities.
Stocks and bonds seem to have liked the news. Stocks are up over 100
points (DOW), and our Mortgage Bonds have spent most of the day up 25 basis points. Technically speaking we are in a nice holding pattern.
Providing that stocks don’t rebound as quickly as they dropped off (stocks are down 4% for the month of January) rate should stay here put.