U.S. Mortgages on the rise last week, Consumer Prices up and Boeing (BA) beat expectations

Bourbon & Bayonets / Wednesday, October 22nd, 2014

There was a rise in applications for U.S. mortgages last week. The Mortgage Bankers Association announced that their index for mortgage activity was up 11.6%. This accounts for both refinancing and new home purchases. The gain was partially attributed to a drop in interest rates last week. There was a jump in refinancing applications of 23.3% and a drop in requests for new home loans of 4.8%. Mike Fratantoni, MBA’s chief economist, said, “Mortgage rates have fallen close to 30 basis points over the last four weeks. Refinance application volume reached the highest level since November 2013 as a result, and the average loan balance for refinance applications increased to $306,400, the highest level in the survey’s history.”

A separate report released this morning showed there was a rise in U.S. consumer prices. The Labor Department said the their Consumer Price Index crept up a mere 0.1% in September, beating out analysts projections of a flat reading. This was partially attributed to a rise in food and shelter prices. The index fell 0.2% the previous moth. Over the past year, the CPI has gained 1.7%. Robert Hughes, a senior research advisor at the American Institute for Economic Research, said, “The ongoing inflation weakness will give the Fed leeway to take a restrained approach to tightening monetary conditions.”

Shares of The Boeing Company (BA) were sinking down over 3.5% after the company announced a boost in profits. The aerospace company said that their profits were up 18% for the third-quarter. Earnings came in at $1.36 billion, or $1.86 per share. This was up from the $1.16 billion, or $1.51 per share this time last year. Core earnings were up to $2.14 per share, beating out analysts’ projections of $1.97. Revenue came in at $34.78 billion, a 7% gain. Chairman and CEO, Jim McNerney, said, “Continued strong operating performance across our production and services business drove significant growth in earnings-per-share, and enabled us to continue to capture new business, pushing our order backlog to a record $490 billion.” Despite the positive news, some analysts have voiced some concern over the company’s 787 Dreamliners. Boeing has had some issues with the production of the plane in the past. Jason Gursky, an analyst with Citi research, said, “Earnings per share and cash flow beat and raise is positive, but more color on the trajectory of 787 deferred production is still needed.”

That’s all for today,

Warren Gates, Normandy Research

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