Here’s a quick excerpt that I found to be interesting. It always amazes me with the infinite amount of variables that affect the market and economy. Weakening factory orders may lead to lower rates. Lets take a closer and in depth look at this…

 Factory orders data is a monthly report released by the US Census Bureau. The realease is officially referred to as The Advance Report on Durable Goods Manufacturers’ Shipments, Inventories, and Orders.

The manufacturing sector is a major component of the economy. Investors use the factory orders report to attempt to determine the direction of the economy in the future. Orders are generally believed to be a precursor to activity in the manufacturing sector because manufacturing typically has an order before considering an increase in production. Conversely, a decrease in orders eventually causes production to scale back; otherwise, the manufacturer accumulates inventories, which must be financed.

The stock market typically likes to see strong factory orders data indicating a surge in future production. On the other hand, bonds typically like weaker figures.

Despite some positive spots in the US economy, manufacturing continues to struggle. If the factory orders data shows a significant increase, stocks may rise on the data. This scenario is likely to pressure mortgage interest rates higher. However, a factory orders report showing continued weakness may help to push mortgage interest rates lower.

The next report for Factory Orders comes out on Wednesday, April 4th, 10:00am. Be sure to use the knowledge provided above to determine what the economy and interest rates are doing. Come back again for another weekly report on the economy. Also be sure to take a look at the employment report coming out on Friday as this will be the most important release nest week. If you see an increase in unemploymnet or a large decrease in payrolls you might be seeing lower rates!

If you're new here, you may want to subscribe by Email. Knowledge is Power!