U.S. MBA Mortgage Index Dropped in Latest Week.
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Asian stock markets were mixed, with Japan outperforming as the Yen halted its advance and the most recent uptick in oil prices underpinned markets. The housing sector in the U.S. is mixed and while housing starts came in stronger than expected the mortgage and purchase index both retreated. Earnings continue to also show mixed results, with Target beating on the top and bottom line and Lowes missing on both counts. Traders await the Fed Minutes scheduled to be released later on Wednesday.
U.S. MBA Mortgage Index Dropped in Latest Week
The housing space in the United States remains robust, but mixed results are now rearing their ugly head. The U.S. MBA mortgage market index sank 4.0%, in addition to the 3.9% drop in the purchase index and 4.2% decline in the refinancing index for the week ended August 12. The contraction in mortgage activity occurred despite a slight 1 basis point dip in the average 30-year mortgage rate to 3.64%, which still remained near historical lows. Yet the housing sector continues to benefit from the low rate environment, with yesterday’s 2.1% gain in housing starts in July.
The 2.1% U.S. housing starts rise in July after small downward revisions, with a 0.1% permits downtick, left a strong report that extended a firm path through the seasonally important spring season. Starts are ratcheting higher from weak Q4 levels, while permits are trending up after a winter zigzag that left a strong Q4 but weak Q1. Starts under construction have climbed sharply into Q3, with steep recent gains of 1.9% in July and 0.9% in June.
In earning news, Target reported its Q2 financial results reporting earnings of 1.23 per share which was 0.11 better than expected. The company also reported revenue of 16.17 billion. Analysts had expected Target to report earnings of $1.12 a share on $16.18 billion in revenue. In last year’s second quarter, Target earned 1.22 a share on sales of $17.43 billion.
Lowes missed on the top and bottom line, which is contrary to the strong results shown by Home Depot. Lowe’s posted a profit of 1.17 billion, or 1.31 a share, up from 1.13 billion, or 1.20, a year earlier. The results were hampered by a 84 million, loss on a currency hedge. Revenue climbed 5.3% to 18.26 billion. Analysts had forecasted 1.42 a share in adjusted earnings on 18.45 billion in revenue.
Original Source: iForex Blog