The day's stock market news was mostly found in earnings reports. Today's Coffee covers the Mortgage Bankers Association Weekly Applications Survey and the EIA's Petroleum Status Report. Chairman Bernanke's semiannual testimony has just begun, and may be covered in a later article.
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Today's stock market news offered up only two economic reports, the Weekly Applications Survey and the EIA's Petroleum Status Report. We also list all the day's earnings reports and provide a preview to Chairman Bernanke's testimony before the Senate Banking Committee.
Weekly Applications Survey
The Mortgage Bankers Association's Weekly Mortgage Applications Survey recovered from the prior week, which had produced the lowest level of activity for the Purchase Index since December of 1996. For the week ended July 16, the Market Composite Index gained 7.6%. It's likely that both the Refinance Index and the Purchase Index benefited from a 10 bps drop in 30-year fixed rate mortgage rates. The Refinance Index jumped 8.6% on the change, and the Purchase Index came off its lows to rise 3.4%. Contain your enthusiasm, as absolute levels of activity are still deeply depressed, and are especially worrying given the lowest every average contracted 30-year fixed rate mortgage rate (4.59%) in survey history.
Oil Inventory Report
The EIA reported on Petroleum Status at 10:30 this morning. The report covering the period ended July 16 offered an important increase to crude oil inventory of 0.4 million barrels; this comes after a week that produced the largest draw of inventory for the year. Some 5.1 million barrels of inventory were drawn on net in the July 9 period. Weather was reportedly partly to blame, and this week's gain seems to confirm that. There was concern due to another large draw the week before last that the near-shore drilling environment might have a significant impact. It seems on-shore producers and production in international waters may be stepping up production in the wake of the offshore drilling moratorium. However, according to one well-known economist, we should be significantly concerned about the President's push to stop drilling. Note: the on-shore pick-up argument was somewhat supported by Halliburton's (NYSE: HAL) recent superb earnings report.
Gasoline in storage increased by 1.1 million barrels through the week covered. Both oil and gas inventory levels stood above the upper limit of the average range for this time of year.
The big story for the market today is Federal Reserve Chairman Bernanke's semiannual report on monetary policy, delivered via testimony to the Senate Banking Committee. We suspect it will not be long before market concerns move from a focus on future Fed rate hikes to worry about Fed inaction with regard to its support of an ailing economy. Meanwhile, the SEC takes up the topic of mutual fund fee structures today.
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