Friday, July 2, 2010
7/2/10
Most rates prices are unchanged with yesterday as mortgage bonds hold onto Thursday’s levels after some earlier volatility. Bonds were improved after the initial jobs report was released, then turned negative, but have since recovered to near unchanged. Expect some more choppiness as the holiday weekend close approaches and Wall Street heads for the Hamptons. The jobs data was weak not just in the pure employment number but also in the reduction of the labor force as many simply give up—a troubling sign and asterisk to the “false” lower unemployment rate (1.2 million workers have given up and don’t count as “unemployed”). The bond market is trading at “crisis” levels and seems like it wants to sell off despite the poor data. And though we have fears of a double dip and sovereign debt issues, we’re not in the day Lehman failed mode. A sell off could happen at any time. No fireworks today folks as the big jobs report yields a level day so far for interest rates. So far… Have a safe and happy Fourth
6/30/10
Most rate prices worsened today as mortgage bonds lose some ground. The house voted to extend the deadline of the homebuyer tax credit to September and the Senate will vote on it today. The house is also voting on financial regulation today as last minute jockeying takes place as upcoming elections are in sight. Across the pond, the ECB lending facility was tapped less than expected by the European banks, suggesting more strength in that sector than many analysts thought ahead of the upcoming stress tests. Stocks are attempting to pare some of the massive sell off from Tuesday despite less than expected ADP private payroll figures.
6/29/10
Rates are the same as yesterdays close this morning, but even with low rates, mortgage traders reported low volumes. Personal Income was up slightly and Personal Consumption (spending) rose .2% – perhaps the consumer is becoming more confident…? The Chicago Fed Survey fell slightly. But critics say that the billions of dollars of stimulus have only moved the problems with our economy from the private to the public sector.
Here this morning interest rates are taking a bit of a breather. The stock markets are pointing to a big down day,
Here this morning interest rates are taking a bit of a breather. The stock markets are pointing to a big down day,
Monday, June 28, 2010
Mortgage Market Review - 6/28/10
This Morning…Monday, June 28, 2010:
This morning one can expect May personal income to rise 0.4% and for personal spending to be up 0.2%; the core PCE deflator is projected to come in at 0.1%. And so for economic news - today we have the Chicago Fed numbers, along with Personal Consumption and Income. It’s a busy week, so stayed tuned.
Last Week:
Last week was a pretty a good one for the rate markets, somewhat driven by the FOMC policy statement after the meeting on Wednesday and huge declines in home sales in May. Volatility in both the stock and bond markets remained high with broad swings occurring on a daily basis. Mortgage rates moved lower following the release of the weak housing data and the improvements seen earlier in the week were reversed following a weak 5-year Treasury auction on Wednesday. The volatility is expected to continue until the future of the economy becomes clear
This Week:
The data calendar is full this week with the main highlight being the June employment report on Friday. Tomorrow we have the S&P/Case-Shiller Home Price Indexes, and the Conference Board's Consumer Confidence stats. Wednesday some ISM numbers, Thursday Jobless Claims, ISM Manufacturing, and Pending Home Sales, but the biggest economic event next week will be the important Employment report on Friday. Early estimates are for a decrease of about 70K jobs in June.
EconomicIndicator
Personal Income and Outlays
Monday, June 28,8:30 am, et
Income up 0.5%Outlays up 0.1%
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
Consumer Confidence
Tuesday, June 29,10:00 am, et
62.
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
ADP Employment
Wednesday, June 30,8:30 am, et
+56K
Important. An indication of the employment. Weakness in payrolls may bring lower rates.
ISM Index
Thursday, July 1,10:00 am, et
58.8
Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
Employment
Friday, July 2,8:30 am, et
Jobs -70KUnemp @ 9.7%
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.
Factory Orders
Friday, July 2,10:00 am, et
-0.6%
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Market Forecast:
Overall, Tuesday and Thursday’s data should bring some volatility in trading and mortgage rates, but Friday’s Employment report is definitely the most important of the week. Its impact can single-handedly lead to an improvement or increase in mortgage rates for the week. Next Monday is when the Independence Day holiday will be recognized. There is no early close for the bond market Friday ahead of it, but it will probably be a light afternoon in trading as traders head home for the long weekend. This could lead to additional volatility during morning trading, particularly with the Employment report being posted.
Some Humor:
A cruise ship suddenly hits rough waters and a huge storm. Lightening comes out of the sky and strikes the ship in half! There is only one survivor, a man, who wakes up on the shore of an island with its only other residents being a dog and a pig.
Months and months go by and after numerous days of watching the seas for help and the occasional smoke signals, no rescue. One day as the man is lying on the beach in the hot sun and starting to go a little nuts. He looks over at the pig and with the help of a little hallucinating the pig appears to be a beautiful woman. He crawls over towards the pig and as soon as he touches the pig the dog bites onto his ankle growling madly. He lets the pig go and the dog releases him. The man comes to his senses and thinks, “Holy Cow! What am I doing?” But over the next few months this happens a few more times: pig transforms into a beautiful woman, man grabs pig, dog snaps onto his ankle growling, man let's go of pig, dog releases the man and the man awakes from his daze.
One day he spots a cruise ship in the distance. He can't believe what he is seeing and is sure that it's another mirage. He starts a fire, sends smoke signals, and jumps up and down screaming! The boat sounds its horns and turns towards the island. Tragically, the ship hits a rock and sinks. He is devastated, but soon the man sees something floating out in the ocean. He swims out, and amazingly it's a beautiful woman. He brings her to shore, applies CPR and resuscitates her back to life. She sits up, stares into his eyes and tells him that after he has saved her life she will do anything for him. He replies "anything?" and she nods yes.
He jumps up an immediately says, "Do you see that dog over there? Can you please take him for a walk"?
The material contained in this newsletter is provided by a compilation of third parties to real estate, financial services and other professionals for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is not without errors.
This morning one can expect May personal income to rise 0.4% and for personal spending to be up 0.2%; the core PCE deflator is projected to come in at 0.1%. And so for economic news - today we have the Chicago Fed numbers, along with Personal Consumption and Income. It’s a busy week, so stayed tuned.
Last Week:
Last week was a pretty a good one for the rate markets, somewhat driven by the FOMC policy statement after the meeting on Wednesday and huge declines in home sales in May. Volatility in both the stock and bond markets remained high with broad swings occurring on a daily basis. Mortgage rates moved lower following the release of the weak housing data and the improvements seen earlier in the week were reversed following a weak 5-year Treasury auction on Wednesday. The volatility is expected to continue until the future of the economy becomes clear
This Week:
The data calendar is full this week with the main highlight being the June employment report on Friday. Tomorrow we have the S&P/Case-Shiller Home Price Indexes, and the Conference Board's Consumer Confidence stats. Wednesday some ISM numbers, Thursday Jobless Claims, ISM Manufacturing, and Pending Home Sales, but the biggest economic event next week will be the important Employment report on Friday. Early estimates are for a decrease of about 70K jobs in June.
EconomicIndicator
Personal Income and Outlays
Monday, June 28,8:30 am, et
Income up 0.5%Outlays up 0.1%
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
Consumer Confidence
Tuesday, June 29,10:00 am, et
62.
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
ADP Employment
Wednesday, June 30,8:30 am, et
+56K
Important. An indication of the employment. Weakness in payrolls may bring lower rates.
ISM Index
Thursday, July 1,10:00 am, et
58.8
Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
Employment
Friday, July 2,8:30 am, et
Jobs -70KUnemp @ 9.7%
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.
Factory Orders
Friday, July 2,10:00 am, et
-0.6%
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Market Forecast:
Overall, Tuesday and Thursday’s data should bring some volatility in trading and mortgage rates, but Friday’s Employment report is definitely the most important of the week. Its impact can single-handedly lead to an improvement or increase in mortgage rates for the week. Next Monday is when the Independence Day holiday will be recognized. There is no early close for the bond market Friday ahead of it, but it will probably be a light afternoon in trading as traders head home for the long weekend. This could lead to additional volatility during morning trading, particularly with the Employment report being posted.
Some Humor:
A cruise ship suddenly hits rough waters and a huge storm. Lightening comes out of the sky and strikes the ship in half! There is only one survivor, a man, who wakes up on the shore of an island with its only other residents being a dog and a pig.
Months and months go by and after numerous days of watching the seas for help and the occasional smoke signals, no rescue. One day as the man is lying on the beach in the hot sun and starting to go a little nuts. He looks over at the pig and with the help of a little hallucinating the pig appears to be a beautiful woman. He crawls over towards the pig and as soon as he touches the pig the dog bites onto his ankle growling madly. He lets the pig go and the dog releases him. The man comes to his senses and thinks, “Holy Cow! What am I doing?” But over the next few months this happens a few more times: pig transforms into a beautiful woman, man grabs pig, dog snaps onto his ankle growling, man let's go of pig, dog releases the man and the man awakes from his daze.
One day he spots a cruise ship in the distance. He can't believe what he is seeing and is sure that it's another mirage. He starts a fire, sends smoke signals, and jumps up and down screaming! The boat sounds its horns and turns towards the island. Tragically, the ship hits a rock and sinks. He is devastated, but soon the man sees something floating out in the ocean. He swims out, and amazingly it's a beautiful woman. He brings her to shore, applies CPR and resuscitates her back to life. She sits up, stares into his eyes and tells him that after he has saved her life she will do anything for him. He replies "anything?" and she nods yes.
He jumps up an immediately says, "Do you see that dog over there? Can you please take him for a walk"?
The material contained in this newsletter is provided by a compilation of third parties to real estate, financial services and other professionals for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is not without errors.
Friday, June 25, 2010
6/25/10
Thursday traders felt that everyone was selling: originators, investors, money managers, etc., especially after a strong, but sloppy, 7-yr auction and mortgage rates did a little worse for the second day in a row. Today we have old GDP news on 1st quarter revisions, expected to be unchanged, and the final June Michigan Sentiment reading, also seen unchanged from mid-month. The press is certainly talking about a “double dip” in the economy, in spite of double-dips in output being extremely rare in modern economic history (only three double-dips in the last 160 years of US business cycles). So far this morning we find mortgage prices slightly worse.
6/24/10
Yesterday the New Home Sales number surprised everyone, plunging almost 33% in May to the lowest level since 1963. Of course, it followed two strong months where buyers rushed into the market due to the tax credit. Regionally, new-home sales plunged 23.9% in the Midwest, 53.2% in the West, 25.4% in the South, and 33.3% in the Northeast. Tuesday's two-year note sale was stellar, but the 5-yr sale did not go well (this took away some of yesterdays gains). The 7-yr notes will be sold today.
Today we’ve had the standard weekly Initial Jobless Claims number. Initial Jobless Claims dropped to 457,000. Six states’ unemployment had increases, and seven had no change. Nevada beat out Michigan for the first time in 4 years, and now has the highest jobless rate in the country (14%). We also found out the May Durable Goods number came in as expected. For now, mortgage rates are slightly improved from yesterdays close.
Today we’ve had the standard weekly Initial Jobless Claims number. Initial Jobless Claims dropped to 457,000. Six states’ unemployment had increases, and seven had no change. Nevada beat out Michigan for the first time in 4 years, and now has the highest jobless rate in the country (14%). We also found out the May Durable Goods number came in as expected. For now, mortgage rates are slightly improved from yesterdays close.
6/23/10
Another round of bad housing data was released this morning in the form of record low new home sales which has stabilized rates after yesterdays improvement. It seems the persistence of the data surprises and negative housing stats is painting a troubling picture of household wealth, deflation and confidence. We have the Fed decision on tap due at 11:15 today. But first we have a 5-year auction around 10am. We could see some choppiness around these events so stay tuned.
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