Economic Update
Stocks are higher today as investors digest geopolitical tensions, Fed comments, and corporate earnings. St. Louis Fed President James Bullard said this morning that he doesn’t believe the Fed is in a recession and that the Fed will continue to work to reel in inflation. Chicago President Charles Evans said there is a chance for a smaller rate hike at the next Fed meeting.

For economic data today, the ISM Services Index unexpectedly increased to 56.7 in July. Business activity and new orders were higher, and prices paid lower. Employment contracted for the 2nd month. The S&P U.S. Services PMI came in at 47.3 for the final July reading, slightly higher than the initial reading.

MBA mortgage applications increased 1.2% last week, the first gain in 5 weeks. Both refinance and purchase applications were slightly higher. The average interest rate of a conforming 30-year mortgage fell 31 basis points to 5.43%, the biggest one week drop since 2020. Elsewhere, U.S. factory orders increased 2.0% in June, more than expected.

Treasury yields are higher this morning, with the 2-year T yield up 9.2 basis points to 3.17%, the 5-year T yield up 8.3 basis points to 2.94%, and the 10-year T yield up 8.0 basis points to 2.82%. Long-term advance rates are higher today.image
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