This Morning…Monday, September 28, 2009:
Treasuries and mortgages opened fractionally lower this morning after two strong days to end last week. There is no economic data to think about today, but the week has a lot to consider with the Sept employment anchoring all of it on Friday.
Last Week:
Mortgage bond prices rose last week pushing mortgage interest rates somewhat lower. The data was mixed with stronger than expected consumer sentiment and a disappointing 5-year Treasury note auction. Fortunately the Fed meeting resulted in some positive mortgage interest rate movements and strong foreign demand for the 7-year Treasury auction helped rates improve.
This Week:
This week we will see quite a bit of economic news that may end up moving rates. As I mentioned, today there is no news, but tomorrow we have the Consumer Confidence numbers, which is generally a market mover. On Wednesday we have the Chicago Purchasing Manager’s Index, and on Thursday Jobless Claims, Pending Home Sales, the ISM number, and the Treasury’s announcement of next week’s auctions. On Friday we will have the Unemployment Data, always sure to grab headlines. Estimates are that the Unemployment Rate will increase from 9.7% to 9.9%. And for good measure this week we’ll also see Personal Income & Consumption, Final GDP, Construction Spending, and Factory Orders. This will be a critical week for the markets. Expect continued volatility in all financial markets.
EconomicIndicator
Consumer Confidence
Tuesday, Sept. 29,10:00 am, et
57.0
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
ADP Employment
Wednesday, Sept. 30,8:30 am, et
Down 200k
Important. An indication of employment. A larger decrease may bring lower rates.
Q2 GDP final revision
Wednesday, Sept. 30,8:30 am, et
Down 1.2%
Moderately important. The aggregate measure of US economic production. Weakness may lead to lower rates.
Personal Income and Outlays
Thursday, Oct. 1,8:30 am, et
Income up 0.1%,Outlays up 1.0%
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
Construction Spending
Thursday, Oct. 1,10:00 am, et
Down 0.2%
Low importance. An indication of economic strength. A significant decrease may lead to lower rates.
ISM Index
Thursday, Oct. 1,10:00 am, et
54.0
Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
Employment
Friday, Oct. 2,8:30 am, et
9.8%,-188k
Very important. An increase in unemployment or a larger decrease in payrolls may bring lower rates.
Factory Orders
Friday, Oct. 2,10:00 am, et
Up 1.1%
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Market Forecast:
The employment report will take center stage this week. Consumer confidence, ADP employment, income, outlays, ISM Index, and factory orders data also have the potential to move the financial markets. The recent economic data has been mixed. Remember that the bond market typically likes to see weaker figures with very little price pressures.
The Fed provided some good news last week when they indicated the purchasing of mortgage bonds would be extended into the first quarter of 2010. Prior to the meeting all indications were the program would stop the end of this year. The Fed also indicated that long term inflation expectations were stable. This is great news for fixed income securities and the stability of mortgage interest rates. Remember, the current goal of the Fed is to keep mortgage interest rates relatively low and stable. They appear to be content with rates in the current historically favorable range.
Some Humor:
A minister decided that a visual demonstration would add emphasis to his Sunday sermon. Four worms were placed into four separate jars. The first worm was put into a container of alcohol. The second worm was put into a container of cigarette smoke. The third worm was put into a container of chocolate syrup. The fourth worm was put into a container of good clean soil.
At the conclusion of the sermon, the Minister reported the following results:
The first worm in alcohol - Dead.
The second worm in cigarette smoke – Dead.
Third worm in chocolate syrup – Dead.
Fourth worm in good clean soil - Alive.
So the Minister asked the congregation, “What can you learn from this demonstration?”
Maxine was sitting in the back, quickly raised her hand and said, “As long as you drink, smoke and eat chocolate, you won't have worms!”
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.
Monday, September 28, 2009
Friday, September 25, 2009
9/25/09
Good morning. Yesterday we learned that Existing Home Sales fell by 2.7% in August, which was unexpected and broke the string of four increases. The median price (half above, half below) was $177,000, which is down 12.5% from a year ago, although sales were up versus a year ago. There’s about an 8-9 month supply on the market. This news helped bonds (a weak economy supposedly leading to lower rates) and hurt stocks, which had their second straight down day. It also helped rates that the 7-yr note auction went well after a mediocre 5-yr auction the day before. This morning we’ve already seen that orders for Durable Goods (items lasting longer than 3 years) were down 2.4%, the biggest drop since January. Not good for stocks, but good for bonds: This morning we have seen some slight improvement in mortgage prices. Have a great weekend.
9/24/09
Yesterday's action in the stock market, closing lower than the previous day after making a new multi-month high earlier in the day, may have a significant impact on the near term outlook in the equity markets. A new high, then closing lower than the previous day, is a technical key reversal. Whether it is meaningful depends on today's trading, a lower close will add to the view stocks may finally be setting up for a major correction. Many times a key reversal pattern leads to a change in direction, but there has to be a lower close today to add conviction and confirm the reversal yesterday. Significant for the rate markets; to drive mortgage rates lower the bullish bias in equities has to be shaken.
9/23/09
With no economic news of note, and the 2-yr auction having gone well, rates are not moving much. Although today’s release of the Fed meeting’s rate decision may change that, depending on the language, no one is looking for an increase in overnight rates. Some economists feel that the Fed will post some language today as to how and when they will begin to wind down the $1.25 trillion mortgage security buying program – but they certainly don’t want to stifle the recovery.
9/22/09
For economic news yesterday we had the Conference Board’s Leading Economic Indicators. Once again, we had a number that shows that the economy’s fall has either turned around or at least stopped – forget all those out-of-work people, or the “For Rent” signs on Main Street. LEI was +.6% after also being up in July and June, and in fact has risen since April after being negative since the summer of 2007. But we also have the Fed continuing to buy Treasuries and mortgage-backed securities – programs that most analysts believe will be gently scaled back as investor interest creeps back into the secondary markets. But both stocks and bonds ended up the day on a down-note, with a few investors even changing prices for the worse. The question for mortgage rates, and rates in general, is how much more money will be pulled out of the bond market and put into stocks? Currently, mortgages are “worse a tad”.
The FOMC meeting begins this morning; a two day meeting, as all are these days, tomorrow at 2:15 we get the policy statement. No increases in rates, what the group thinks about the recovery and comments on unemployment are likely the key concerns.
The FOMC meeting begins this morning; a two day meeting, as all are these days, tomorrow at 2:15 we get the policy statement. No increases in rates, what the group thinks about the recovery and comments on unemployment are likely the key concerns.
Monday, September 21, 2009
Mortgage Market Review - 9/21/09
This past week, the Citizens Against Government Waste (a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government) came out with their yearly Pig Book Summary. This profiles the most startling examples of government pork, breaks them down, and presents the annual "Oinker" Awards. All 10,160 projects are listed in a searchable database on CAGW’s website http://www.cagw.org/. Examples of pork in the 2009 Pig Book include:
- $3.8 million for the Old Tiger Stadium Conservancy in Detroit;
$1.9 million for the Pleasure Beach water taxi service in Connecticut;
$1.8 million for swine odor and manure management research in Ames, Iowa;
$380,000 for a recreation and fairgrounds area in Kotzebue, Alaska;
$143,000 for the Greater New Haven Labor History Association in Connecticut;
$95,000 for the Canton Symphony Orchestra Association in Ohio; and
$71,000 for Dance Theater Etcetera in Brooklyn for its Tolerance through Arts initiative.
It’s interesting to see that even in these times, the abuse of funds continues. Anyway…thanks for taking the time to read this, have a great week and congratulations to the Huskies!
This Morning…Monday, September 21, 2009:
We have the Conference Board’s Leading Economic Indicators today at 10AM EST, but after that there is no scheduled economic news until Thursday. In its place we have 3 Treasury auctions, starting with the 2-yr tomorrow, then the 5-yr Wednesday and the 7-yr Thursday, along with the FOMC meeting. Don’t look for any change in overnight rates (remember that they do not set mortgage rates – supply & demand does that). Later in the week we have Existing Home Sales, New Home Sales, Durable Goods, and Consumer Sentiment. This morning, mortgage prices are roughly unchanged from Friday afternoon.
Last Week:
Mortgage bond prices fell last week pushing mortgage interest rates higher. Producer Price Index (PPI) data release last Tuesday was much higher that expected and sparked inflation fears. That data set the tone for negative trading early in the week. Thankfully, the Consumer Price Index (CPI), a better gauge of overall inflation, was lower that expected helping interest rates recover.
This Week:
The record debt will once again take center stage. We are hopeful that foreign demand will remain strong. The Fed meeting will be the most significant event this week. While no adjustments are expected, the Fed remarks will be carefully weighed.
EconomicIndicator
Leading Economic Indicators
Monday, Sept. 21,10:00 am, et
Up 0.7%
Important. An indication of future economic activity. A smaller increase may lead to lower rates.
2-year Treasury Note Auction
Tuesday, Sept. 22,1:30 pm, et
None
Important. $43 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
5-year Treasury Note Auction
Wednesday, Sept. 23,1:30 pm, et
None
Important. $40 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Fed Meeting Adjourns
Wednesday, Sept. 23,2:15 pm, et
No rate change
Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting.
Existing Home Sales
Thursday, Sept. 24,10:00 am, et
Up 1.7%
Low importance. An indication of mortgage credit demand. Significant weakness may lead to lower rates.
7-year Treasury Note Auction
Thursday, Sept. 24,1:30 pm, et
None
Important. $29 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Durable Goods Orders
Friday, Sept. 25,8:30 am, et
Down 0.1%
Important. An indication of the demand for "big ticket" items. Weakness may lead to lower rates.
U of Michigan Consumer Sentiment
Friday, Sept. 25,10:00 am, et
70.0
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
New Home Sales
Friday, Sept. 25,10:00 am, et
Up 1.6%
Important. An indication of economic strength and credit demand. A decrease may lead to lower rates.
Market Forecast:
If foreign demand remains strong for the Treasury auctions this week, rates should remain the same or even improve. This would depend on whether or not investors increase selling and profit-taking on stocks. The Fed meeting will be the most significant event this week. While no adjustments are expected, the Fed remarks will be carefully weighed.
Some Humor:
A boy enters the confessional at the local Catholic church.
"Bless me Father, for I have sinned. I have been with a loose girl."
The priest asks, "Is that you, little Joey Pagano?""
Yes, Father, it is.""And who was the girl you were with?"
"I can't tell you, Father. I don't want to ruin her reputation."
"Well, Joey, I'm sure to find out her name sooner or later so you may as well tell me now. Was it Fran Rubino?"
"I cannot say."
"Was it Erin Calabrese?"
"I'll never tell."
"Was it Nina Faneli?"
"I'm sorry, but I cannot name her."
"Was it Tonia Russo?"
"My lips are sealed."
"Was it Suzanna Pomilia, then?"
"Please, Father, I cannot tell you."
The priest sighs in frustration. “You're very tight lipped, and I admire that. But you've sinned and have to atone. You cannot be an altar boy now for 4 months. Now you go and behave yourself."
Joey walks back to his pew, and his friend Franco slides over and whispers, "'What'd you get?"
Joey replies, "Four months vacation and five good leads."
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, September 18, 2009
9/18/09
We are about to find out what it is like with no scheduled economic news for roughly the next five business days. We’ve certainly had our fill this week, ending with yesterday. The Philly Fed report suggested that manufacturers are being squeezed by higher raw materials costs, and the need to slash prices to make sales. This morning we find mortgage prices a “smidge” worse. Have a great weekend.
9/17/09
Good morning. The market continues to be interesting. Stocks are improving on signs of economic stabilization and growth, while interest rates are steady. The Federal Open Market Committee (FOMC) meets next week and yesterday there was a rumor that the Fed will soon preparing the markets for higher rates due to the continued signs of economic growth (or at least leveling off). Yesterday’s Industrial Production and Capacity Utilization numbers reinforced this, and the bond market saw rates slide up. This morning we have Housing Starts and Building Permits, along with the Philly Fed survey and the usual Jobless Claims. Housing Starts and Building Permits rose in August to their highest level since November, lifted by a rebound in multifamily homes. And Jobless Claims dropped by 12,000 to 545,000, the lowest reading since July (still 545,000 new claims!). Through all of this, mortgage prices are also roughly unchanged from yesterday.
9/16/09
Hello. This morning we have already had the Consumer Price Index. Later on we will see Industrial Production and Capacity Utilization. U.S. consumer prices in August were slightly faster than expected and after being flat in July. As anyone with a car knows, gasoline was the primary culprit – it was up over 9%. The core CPI was +.1%. Year-over-year, however, the CPI is still down 1.5%, and “experts” think that continued weakness in the labor market and modest consumer spending will keep price pressures in check for a while. After the news 30-yr mortgage prices are slightly better
Nothing else on the calendar today for economic reads. The bond and mortgage markets remain technically positive,
Nothing else on the calendar today for economic reads. The bond and mortgage markets remain technically positive,
9/15/09
Although the market was basically unchanged overnight, this morning we have had a good dose of economic news which has moved rates higher. Retail Sales had their biggest monthly advance in over 3 years. This is obviously attributed to car sales but also outside of that sector. (Auto sales were up 10.6% in August.) We also had the US Producer Price Index come out twice as much as was expected. It didn’t help that gasoline prices saw their biggest jump in more than 10 years. The Labor Department said PPI jumped 1.7% last month and fell 4.3% from August 2008. Although we still have the Empire State Manufacturing data, the PPI and Retail Sales numbers knocked rates up.
Monday, September 14, 2009
Mortgage Market Review - 9/14/09
This Morning…Monday, September 14, 2009:
No economic data to think about today, but the calendar this week has a lot to chew on. Much of the weekend talk centered on increasing trade tensions with China. President Obama imposed tariffs on Chinese tires, as the worlds fastest- growing major economy said it is investigating U.S. sales of chicken and auto products. At mid-day Pres Obama is coming to Wall Street to speak on the economic mess and likely something on the China situation. As this is the 1st anniversary of the Lehman Bros failure which was the trigger of the financial system meltdown, he will spend most of his efforts talking about financial system reforms. The market will likely take its signs from the stock market today.
Last Week:
Mortgage bond prices rose last week pushing mortgage interest rates slightly lower. The US Treasury auctions went well with relatively strong foreign demand for most issues. The gains came as the Fed continued to pour billions into mortgage bonds in an effort to keep rates low to stabilize the housing sector of the economy. The data was mixed as weekly jobless claims came in better than expected and the Fed "Beige Book" indicated inflation remained in check.
This Week:
Whereas last week we didn’t have much news, aside from the well-received auctions which helped rates, this week we have the monthly inflation reports. The Producer Price Index (PPI) comes out tomorrow, focusing on the increase in prices of "intermediate" goods used by companies. The Consumer Price Index (CPI) comes out Wednesday, and is watched closely since it looks at the price changes that consumers see. Given the current economic environment, inflation is not a major issue, but these can definitely move the markets. We also have Retail Sales tomorrow, Industrial Production and Capacity Utilization comes out Wednesday, on Thursday we have Jobless Claims, Housing Starts, and the Treasury’s announcement of the size of next week’s auctions.
EconomicIndicator
Producer Price Index
Tuesday, Sept. 15,8:30 am, et
Up 0.8%,Core up 0.1%
Important. An indication of inflationary pressures at the producer level. Lower figures may lead to lower rates.
Retail Sales
Tuesday, Sept. 15,8:30 am, et
Up 1.6%
Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates.
Business Inventories
Tuesday, Sept. 15,10:00 am, et
Down 0.8%
Low importance. An indication of stored-up capacity. A significantly large increase may lead to lower rates.
Consumer Price Index
Wednesday, Sept. 16,8:30 am, et
Up 0.4%,Core up 0.1%
Important. A measure of inflation at the consumer level. Lower figures may lead to lower rates.
Industrial Production
Wednesday, Sept. 16,9:15 am, et
Up 0.7%
Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates.
Capacity Utilization
Wednesday, Sept. 16,9:15 am, et
69.1%
Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower interest rates.
Housing Starts
Thursday, Sept. 17,8:30 am, et
Up 1.2%
Important. A measure of housing sector strength. Weakness may lead to lower rates.
Philadelphia Fed Survey
Thursday, Sept. 17,10:00 am, et
None
Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Market Forecast:
The consumer price index will be the most important data this week. If inflation indications are tame rates will likely hold steady or improve. However, if inflation increases look for mortgage interest rates to spike higher.
There are no Treasury auctions this week, but on Thursday markets will begin thinking about it again when Treasury announces the following week's offerings (2 yr note, 5 yr note and 7 yr auction); likely the total will be in the $109B range. Normally supply puts pressure on the rate markets but recent auctions have met with solid demand, thus traders are not quite as interested. Keep alert for Barney Frank, he is back and he is at the ready to reek more havoc on the mortgage industry. Likely there will continuing concern over the health care issue. Still the giant in the room is the equity markets; no signs of it weakening.
Some Humor:
The coach had put together the perfect team for the Oakland Raiders. The only thing that was missing was a good quarterback. He had scouted all the colleges and even the Canadian and European Leagues, but he couldn't find a ringer who could ensure a Super Bowl win.
Then one night while watching CNN he saw a war-zone scene in Afghanistan. In the background, he spotted a young Afghan Muslim soldier with a truly incredible arm. He threw a hand-grenade straight into a 10th story window 50 yards away.
KABOOM!
He threw another hand-grenade 75 yards away, right into a chimney.
KA-BLOOEY!
Then he threw another at a passing car going 50 mph.
BULLS-EYE!
"I've got to get this guy!" Coach said to himself. "He has the perfect arm!" So, he brings him to the States and teaches him the great game of football. And the Raiders go on to win the Super Bowl.
The young Afghan is hailed as the great hero of football, and when the coach asks him what he wants, all the young man wants is to call his mother.
"Mom," he says into the phone, "I just won the Super Bowl!"
"I don't want to talk to you, the old Muslim woman says."You are not my son!"
"I don't think you understand, Mother," the young man pleads. "I've won the greatest sporting event in the world. I'm here among thousands of my adoring fans."
"No! Let me tell you!" his mother retorts. "At this very moment, there are gunshots all around us. The neighborhood is a pile of rubble. Your two brothers were beaten within an inch of their lives last week, and I have to keep your sister in the house so she doesn't get assaulted!"
The old lady pauses, and then tearfully says, "I will never forgive you for making us move to Oakland!”
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.
No economic data to think about today, but the calendar this week has a lot to chew on. Much of the weekend talk centered on increasing trade tensions with China. President Obama imposed tariffs on Chinese tires, as the worlds fastest- growing major economy said it is investigating U.S. sales of chicken and auto products. At mid-day Pres Obama is coming to Wall Street to speak on the economic mess and likely something on the China situation. As this is the 1st anniversary of the Lehman Bros failure which was the trigger of the financial system meltdown, he will spend most of his efforts talking about financial system reforms. The market will likely take its signs from the stock market today.
Last Week:
Mortgage bond prices rose last week pushing mortgage interest rates slightly lower. The US Treasury auctions went well with relatively strong foreign demand for most issues. The gains came as the Fed continued to pour billions into mortgage bonds in an effort to keep rates low to stabilize the housing sector of the economy. The data was mixed as weekly jobless claims came in better than expected and the Fed "Beige Book" indicated inflation remained in check.
This Week:
Whereas last week we didn’t have much news, aside from the well-received auctions which helped rates, this week we have the monthly inflation reports. The Producer Price Index (PPI) comes out tomorrow, focusing on the increase in prices of "intermediate" goods used by companies. The Consumer Price Index (CPI) comes out Wednesday, and is watched closely since it looks at the price changes that consumers see. Given the current economic environment, inflation is not a major issue, but these can definitely move the markets. We also have Retail Sales tomorrow, Industrial Production and Capacity Utilization comes out Wednesday, on Thursday we have Jobless Claims, Housing Starts, and the Treasury’s announcement of the size of next week’s auctions.
EconomicIndicator
Producer Price Index
Tuesday, Sept. 15,8:30 am, et
Up 0.8%,Core up 0.1%
Important. An indication of inflationary pressures at the producer level. Lower figures may lead to lower rates.
Retail Sales
Tuesday, Sept. 15,8:30 am, et
Up 1.6%
Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates.
Business Inventories
Tuesday, Sept. 15,10:00 am, et
Down 0.8%
Low importance. An indication of stored-up capacity. A significantly large increase may lead to lower rates.
Consumer Price Index
Wednesday, Sept. 16,8:30 am, et
Up 0.4%,Core up 0.1%
Important. A measure of inflation at the consumer level. Lower figures may lead to lower rates.
Industrial Production
Wednesday, Sept. 16,9:15 am, et
Up 0.7%
Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates.
Capacity Utilization
Wednesday, Sept. 16,9:15 am, et
69.1%
Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower interest rates.
Housing Starts
Thursday, Sept. 17,8:30 am, et
Up 1.2%
Important. A measure of housing sector strength. Weakness may lead to lower rates.
Philadelphia Fed Survey
Thursday, Sept. 17,10:00 am, et
None
Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Market Forecast:
The consumer price index will be the most important data this week. If inflation indications are tame rates will likely hold steady or improve. However, if inflation increases look for mortgage interest rates to spike higher.
There are no Treasury auctions this week, but on Thursday markets will begin thinking about it again when Treasury announces the following week's offerings (2 yr note, 5 yr note and 7 yr auction); likely the total will be in the $109B range. Normally supply puts pressure on the rate markets but recent auctions have met with solid demand, thus traders are not quite as interested. Keep alert for Barney Frank, he is back and he is at the ready to reek more havoc on the mortgage industry. Likely there will continuing concern over the health care issue. Still the giant in the room is the equity markets; no signs of it weakening.
Some Humor:
The coach had put together the perfect team for the Oakland Raiders. The only thing that was missing was a good quarterback. He had scouted all the colleges and even the Canadian and European Leagues, but he couldn't find a ringer who could ensure a Super Bowl win.
Then one night while watching CNN he saw a war-zone scene in Afghanistan. In the background, he spotted a young Afghan Muslim soldier with a truly incredible arm. He threw a hand-grenade straight into a 10th story window 50 yards away.
KABOOM!
He threw another hand-grenade 75 yards away, right into a chimney.
KA-BLOOEY!
Then he threw another at a passing car going 50 mph.
BULLS-EYE!
"I've got to get this guy!" Coach said to himself. "He has the perfect arm!" So, he brings him to the States and teaches him the great game of football. And the Raiders go on to win the Super Bowl.
The young Afghan is hailed as the great hero of football, and when the coach asks him what he wants, all the young man wants is to call his mother.
"Mom," he says into the phone, "I just won the Super Bowl!"
"I don't want to talk to you, the old Muslim woman says."You are not my son!"
"I don't think you understand, Mother," the young man pleads. "I've won the greatest sporting event in the world. I'm here among thousands of my adoring fans."
"No! Let me tell you!" his mother retorts. "At this very moment, there are gunshots all around us. The neighborhood is a pile of rubble. Your two brothers were beaten within an inch of their lives last week, and I have to keep your sister in the house so she doesn't get assaulted!"
The old lady pauses, and then tearfully says, "I will never forgive you for making us move to Oakland!”
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, September 11, 2009
9/11/09
Good morning and happy Friday! Yesterday, once again, both stocks and bonds rallied. We were helped in part, with a decent 30-yr auction by the Treasury. On top of that, Treasury Secretary Geithner was in the news suggesting that as they see signs of strength, the government will not be hesitant in reducing its role in the markets. In addition, he said that unemployment is still too high, but that the recovery will be gradual. This morning we find mortgages roughly unchanged from Thursday afternoon but slightly better than Thursday morning.
The remainder of the session likely will be subdued; it is Friday with next week filled with key economic reports (August retail sales the most significant on Tuesday). Four separate reports on the manufacturing and business sector and August housing starts and permits also to be digested. Have a great weekend.
The remainder of the session likely will be subdued; it is Friday with next week filled with key economic reports (August retail sales the most significant on Tuesday). Four separate reports on the manufacturing and business sector and August housing starts and permits also to be digested. Have a great weekend.
9/10/09
Yesterday’s markets saw a little improvement in both stocks and bonds. In the bond market, the Treasury’s 10-yr auction went pretty well. Today we have a 30-yr bond auction, and traders are hoping it goes as well as the last two. We did have some news this morning. The U.S. trade deficit widened the most in more than 10 years in July, with imports up almost 5% attributed to our demand for foreign cars, consumer goods and oil. We also saw weekly Jobless Claims drop last week.
Some experts are thinking that we might see a decrease in rates after this coming Tuesday’s Retail Sales Report comes out. The indicator for this was last Tuesdays report on Consumer Credit. Though expected to be down $4.1B consumer credit plunged $21.6B. This was an obvious sign that consumers were not spending. Surprisingly, the market had no reaction to this. Certain economists are thinking that the Retail Sales numbers will fall into line with this report and it will create a move to the safety of bonds which should help mortgage rates. I’ll be in touch.
Some experts are thinking that we might see a decrease in rates after this coming Tuesday’s Retail Sales Report comes out. The indicator for this was last Tuesdays report on Consumer Credit. Though expected to be down $4.1B consumer credit plunged $21.6B. This was an obvious sign that consumers were not spending. Surprisingly, the market had no reaction to this. Certain economists are thinking that the Retail Sales numbers will fall into line with this report and it will create a move to the safety of bonds which should help mortgage rates. I’ll be in touch.
9/9/09
Good morning. The market opened a little weaker this morning, but mortgage rates are unchanged. Yesterday’s auction of 3 year Treasuries went well and this afternoon the Treasury will auction 10 yr notes in the second of three auctions this week. Also this afternoon the Fed will release the Beige Book, which is their detailed report on the economy from the 12 Fed districts. Lots of detail in the Beige Book but generally nothing that markets are not already aware of.
Tuesday, September 8, 2009
Mortgage Market Review - 9/8/09
This Morning…Tuesday, September 8, 2009:
By 10:00 this morning, after looking strong early in the futures trading, the stock market was still holding gains but has already backed off the best levels seen on the open at 9:30. Global markets all rallied overnight which led to the strong open. Treasuries are struggling a little this morning with the Treasury auctions this week. Not a lot of juice for the squeezer this week, making trade a little more precarious. Mortgage prices at 10:00 are generally unchanged this morning, but rates are higher than Friday’s.
Last Week:
Mortgage rates improved early last week then loss most of the gains on Friday. The gains came following some stock weakness, signs that unemployment may rise, and better than expected productivity. Increased productivity allows companies to produce more with the same labor input. This helps keep costs in check and alleviates inflation fears. Overall, mortgage prices improved fractionally on the week.
This Week:
For economic news, this is one of those weeks where there is not much. In fact, the Treasury auctions may have the greatest impact on mortgage rates this week with $70 billion in 3-yr, 10-yr, and 30-yr auctions today, tomorrow, and Thursday. Thursday we also have Jobless Claims and the Trade Balance figures, and on Friday some import & export price news and the Michigan Consumer Sentiment numbers. This week will finally have everyone back at their desks after two weeks of final summer holidays which may account for slightly less volatility.
EconomicIndicator
3-year Treasury Note Auction
Tuesday, Sept. 8,1:30 pm, et
None
Important. $38 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Consumer Credit
Tuesday, Sept. 8,3:00 pm, et
Down $4.0 billion
Low importance. A significantly large increase may lead to lower mortgage interest rates.
Fed "Beige Book"
Wednesday, Sept 9,2:00 pm, et
None
Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates.
10-year Treasury Note Auction
Wednesday, Sept 9,1:30 pm, et
None
Important. $20 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Trade Data
Thursday, Sept. 10,8:30 am, et
$27.0 billion deficit
Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
30-year Treasury Bond Auction
Thursday, Sept. 10,1:30 pm, et
None
Important. $12 billion of bonds will be auctioned. Strong demand may lead to lower mortgage rates.
U of Michigan Consumer Sentiment
Friday, Sept. 11,10:00 am, et
67.3
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
Market Forecast:
The Fed "Beige Book" will be the most important data this week. The Treasury auctions will also set the tone for mortgage interest rates. Strong foreign demand could result in mortgage interest rates improvements.
There is a real threat that continued global economic turmoil might keep foreign investors from purchasing mortgage bonds in the future. The Treasury auctions this week will be important in determining the current appetite of foreign investors for dollar denominated securities. If this week’s auctions are poorly bid mortgage bond prices could fall pressuring mortgage interest rates higher.
Some Humor:
A Mafia Godfather finds out that his bookkeeper has cheated him out of ten million bucks. His bookkeeper is deaf. That was the reason he got the job in the first place - it was assumed that a deaf bookkeeper would not hear anything that he might have to testify about in court.
When the Godfather goes to confront the bookkeeper about his missing $10 million, he brings along his attorney, who knows sign language. The Godfather tells the lawyer, “Ask him where the $10 million bucks he embezzled from me is.”
The attorney, using sign language, asks the bookkeeper where the money is.
The bookkeeper signs back: “I don't know what you are talking about.”
The attorney tells the Godfather: “He says he doesn't know what you're talking about.”
The Godfather pulls out a pistol, puts it to the bookkeeper's temple and says, “Ask him again!”
The attorney signs to the bookkeeper: “He'll kill you if you don't tell him!”
The bookkeeper signs back: “OK, OK! You win! I will tell you, just don't hurt me. The money is in a brown briefcase, buried behind the shed in my cousin Anthony's backyard in Queens!”
The Godfather asks the attorney: “Well, what'd he say?”
The attorney replies: “He says you don't have the courage to pull the trigger.”
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.
By 10:00 this morning, after looking strong early in the futures trading, the stock market was still holding gains but has already backed off the best levels seen on the open at 9:30. Global markets all rallied overnight which led to the strong open. Treasuries are struggling a little this morning with the Treasury auctions this week. Not a lot of juice for the squeezer this week, making trade a little more precarious. Mortgage prices at 10:00 are generally unchanged this morning, but rates are higher than Friday’s.
Last Week:
Mortgage rates improved early last week then loss most of the gains on Friday. The gains came following some stock weakness, signs that unemployment may rise, and better than expected productivity. Increased productivity allows companies to produce more with the same labor input. This helps keep costs in check and alleviates inflation fears. Overall, mortgage prices improved fractionally on the week.
This Week:
For economic news, this is one of those weeks where there is not much. In fact, the Treasury auctions may have the greatest impact on mortgage rates this week with $70 billion in 3-yr, 10-yr, and 30-yr auctions today, tomorrow, and Thursday. Thursday we also have Jobless Claims and the Trade Balance figures, and on Friday some import & export price news and the Michigan Consumer Sentiment numbers. This week will finally have everyone back at their desks after two weeks of final summer holidays which may account for slightly less volatility.
EconomicIndicator
3-year Treasury Note Auction
Tuesday, Sept. 8,1:30 pm, et
None
Important. $38 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Consumer Credit
Tuesday, Sept. 8,3:00 pm, et
Down $4.0 billion
Low importance. A significantly large increase may lead to lower mortgage interest rates.
Fed "Beige Book"
Wednesday, Sept 9,2:00 pm, et
None
Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates.
10-year Treasury Note Auction
Wednesday, Sept 9,1:30 pm, et
None
Important. $20 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Trade Data
Thursday, Sept. 10,8:30 am, et
$27.0 billion deficit
Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
30-year Treasury Bond Auction
Thursday, Sept. 10,1:30 pm, et
None
Important. $12 billion of bonds will be auctioned. Strong demand may lead to lower mortgage rates.
U of Michigan Consumer Sentiment
Friday, Sept. 11,10:00 am, et
67.3
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
Market Forecast:
The Fed "Beige Book" will be the most important data this week. The Treasury auctions will also set the tone for mortgage interest rates. Strong foreign demand could result in mortgage interest rates improvements.
There is a real threat that continued global economic turmoil might keep foreign investors from purchasing mortgage bonds in the future. The Treasury auctions this week will be important in determining the current appetite of foreign investors for dollar denominated securities. If this week’s auctions are poorly bid mortgage bond prices could fall pressuring mortgage interest rates higher.
Some Humor:
A Mafia Godfather finds out that his bookkeeper has cheated him out of ten million bucks. His bookkeeper is deaf. That was the reason he got the job in the first place - it was assumed that a deaf bookkeeper would not hear anything that he might have to testify about in court.
When the Godfather goes to confront the bookkeeper about his missing $10 million, he brings along his attorney, who knows sign language. The Godfather tells the lawyer, “Ask him where the $10 million bucks he embezzled from me is.”
The attorney, using sign language, asks the bookkeeper where the money is.
The bookkeeper signs back: “I don't know what you are talking about.”
The attorney tells the Godfather: “He says he doesn't know what you're talking about.”
The Godfather pulls out a pistol, puts it to the bookkeeper's temple and says, “Ask him again!”
The attorney signs to the bookkeeper: “He'll kill you if you don't tell him!”
The bookkeeper signs back: “OK, OK! You win! I will tell you, just don't hurt me. The money is in a brown briefcase, buried behind the shed in my cousin Anthony's backyard in Queens!”
The Godfather asks the attorney: “Well, what'd he say?”
The attorney replies: “He says you don't have the courage to pull the trigger.”
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, September 4, 2009
9/4/09
In general economic news ahead of this 3-day weekend here in the US, overnight it was relatively quiet in rate-land. This morning, however, the jobs data (which typically comes out on the first Friday of every month) was stronger than expected. Nonfarm Payroll was “only” down 216,000 jobs in August, although the headline Unemployment Rate hit a 26-year high at 9.7%. An interesting side note is that the labor force increased by 73,000 in August, indicating the return of some jobless workers who had given up looking for work accounting for part of the rise in the unemployment rate. The August numbers, although bad, indicated that perhaps the pace of layoffs was easing from early this year. After the news we find 30-yr mortgage security prices only slightly worse. There is no early close for the bond market, but really, who wants to be at work on a Friday afternoon ahead of a holiday?
9/3/09
Yesterday’s market was more of the same: stocks feeling a little heavy, relatively weak economic information, and some nervousness about the job’s data tomorrow ahead of a 3-day weekend. Factory Orders came out less than expected. The big news, if there was any, was release of the FOMC Minutes from the August 12th meeting. Surprises were kept to a minimum. The FOMC discussed trimming the mortgage backed security and Fannie/Freddie purchase program, see the economy slowly recovering during the 2nd half of 2009, households continuing to face tight credit but that consumer spending was stabilizing. With little inflation on the horizon, they see the risk of substantial disinflation. Not only that, but several members see a sizable risk of bank credit losses. Just what we need, huh?
So far this morning yesterday’s bond market improvements have gone away, primarily attributed to a rally in the Asian equity markets. There is talk of the Chinese government taking steps to support their markets. Their Central Bank did vote to leave their rates unchanged last night. The only news out today is that Jobless Claims are down, but there was no noticeable reaction to the report. We will also have the Treasury’s announcement for the 3, 10, and 30-yr auction next week. As I mentioned, rates are slightly worse this morning.
So far this morning yesterday’s bond market improvements have gone away, primarily attributed to a rally in the Asian equity markets. There is talk of the Chinese government taking steps to support their markets. Their Central Bank did vote to leave their rates unchanged last night. The only news out today is that Jobless Claims are down, but there was no noticeable reaction to the report. We will also have the Treasury’s announcement for the 3, 10, and 30-yr auction next week. As I mentioned, rates are slightly worse this morning.
9/2/09
Market news was all over the place yesterday. Construction Spending was down in July, and year-over-year spending is down 10.5%. We also had the National Association of Realtors report that Pending Home Sales were up 3.2%, more than forecast, and once again attributed to lower rates, less expensive houses, and the tax credit (which expires around Thanksgiving).
Today we have Factory Orders and the FOMC Minutes. Already this morning we had the ADP employment numbers (which don’t include government jobs), which showed that job losses in the U.S. private sector fell to their lowest monthly level in nearly a year. “Only” 298,000 jobs were cut in August. After this tidbit we find mortgage rates unchanged but still very low.
Today we have Factory Orders and the FOMC Minutes. Already this morning we had the ADP employment numbers (which don’t include government jobs), which showed that job losses in the U.S. private sector fell to their lowest monthly level in nearly a year. “Only” 298,000 jobs were cut in August. After this tidbit we find mortgage rates unchanged but still very low.
9/1/09
Good morning. The market moved around quite a bit yesterday and finally settled late afternoon with a very slight improvement to rates. This morning we had the Chicago Purchasing Managers Index, which increased to its highest level since September. As I explained yesterday, economists watch this number for an early read on the economy. Today we will have Construction Spending and the ISM index. Each day now we move closer to the mother of all data, the employment report, where the rubber meets the road; the so-called consensus is for job losses to be just 200K, but the range of guesses is very wide (-365K to -115K). The unemployment rate is expected at 9.6%, up from July. This report is due on Friday morning. Currently mortgage prices are a smidge worse than yesterday afternoon. Let me know if you have any questions.
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