Friday, January 29, 2010
1/29/10
Most rates are level this morning. Positive economic news sent the Dow rallying early, while treasuries and mortgage bonds took a hit. The trend has since reversed itself, and bonds are turning positive. The US economy expanded at the highest rate in 6 years in the 4th quarter last year and was a full percent better than the expected growth. The consumer (which drives 2/3 of the economy) is seemingly happier, and is depleting manufacturer inventories. A happy consumer makes Wall Street healthy, wealthy, and…… we’ll leave the last part out. Nevertheless, companies are finally starting to hire again and it seems like employment will be the last step to recovery this time.
Thursday, January 28, 2010
1/28/10
Good morning. Most rate prices worsened today as mortgage bonds continue to lose ground after yesterday’s FOMC rate decision. Although the Fed decided to keep rates low for and extended period and offered no changes to the MBS program, Bonds did not take kindly to the text. Many blame the lone dissenter, Kansas City Fed President Hoenig, for not showing a united Fed determined to keep rates low. He is a known inflation hawk and his views should be no surprise, but markets will be markets. In news released today: Chicago Fed economic activity decreased in December while durable goods orders increased and jobless claims decreased. Overall not a bond friendly set of data. Today brings the last of this weeks Treasury auctions with 7-year notes being offered up. Yesterday’s 5-year went well. Let’s hope the same for the 7s today. Mortgage rates attempted a recovery earlier but are stubbornly staying negative widening a bit to Treasuries…
Wednesday, January 27, 2010
1/26/10
Good morning. My apologies for missing these updates for a few days. I was out of town on Monday and spent all day yesterday catching up. In any case…This morning the market is flat as we are waiting for the FED announcement. New Home Sales came in lower than expected, but didn’t have much impact on the market.
The market has a fair number of reasons to go up or down from here – or maybe just stay put. With some Chinese banks ordered to raise their reserve ratios, Japan's outlook cut to negative by S&P, the UK's Q4 GDP coming in less than expected, and Obama's proposal to put a 3yr freeze on discretionary spending, rates should go down. But we have the uncertainty of the Fed announcement today, this week’s huge Treasury auction, Consumer Confidence coming in higher than expected, and the stock market “hanging tough”, which could all push rates higher. We also had the Case-Schiller index of home prices (which sample 20 US cities) show an increase for the 6th straight month in November. It was only down about 5% from the previous November, the smallest year-over-year decline in two years. In other words…the only thing we know for sure, is today’s rates. Uncertainly will continue to rule.
The market has a fair number of reasons to go up or down from here – or maybe just stay put. With some Chinese banks ordered to raise their reserve ratios, Japan's outlook cut to negative by S&P, the UK's Q4 GDP coming in less than expected, and Obama's proposal to put a 3yr freeze on discretionary spending, rates should go down. But we have the uncertainty of the Fed announcement today, this week’s huge Treasury auction, Consumer Confidence coming in higher than expected, and the stock market “hanging tough”, which could all push rates higher. We also had the Case-Schiller index of home prices (which sample 20 US cities) show an increase for the 6th straight month in November. It was only down about 5% from the previous November, the smallest year-over-year decline in two years. In other words…the only thing we know for sure, is today’s rates. Uncertainly will continue to rule.
Friday, January 22, 2010
1/22/10
After Jobless Claims, and the earnings results yesterday, we had more economic news. (There is none today.) Leading Economic Indicators was up in December, after showing positive numbers in October and November. But the Philly Fed Survey fell more than expected although it is still well within positive growth territory.
Although the markets had another relatively non-volatile day, we did see some intra-day price changes for the better as the equity markets worsened. The two markets do not always move in different directions, but yesterday they certainly did. So with no news scheduled, we find mortgage prices about unchanged from Thursday afternoon.
Although the markets had another relatively non-volatile day, we did see some intra-day price changes for the better as the equity markets worsened. The two markets do not always move in different directions, but yesterday they certainly did. So with no news scheduled, we find mortgage prices about unchanged from Thursday afternoon.
1/21/10
Today we’ve already had Jobless Claims, soon will have the Philly Fed, and later will have next week’s Treasury auction announcement. (The Fed also meets next week.) Jobless Claims unexpectedly rose last week as claims delayed from the year-end holidays were pushed through
Goldman Sachs Group reported fourth-quarter net income of $4.95 billion compared with a loss of $2.12 billion a year earlier (amazing!). Overall the markets are quiet, with mortgage prices unchanged.
Goldman Sachs Group reported fourth-quarter net income of $4.95 billion compared with a loss of $2.12 billion a year earlier (amazing!). Overall the markets are quiet, with mortgage prices unchanged.
1/20/10
Good morning. Yesterday was pretty quiet in the markets. Today we have had a flurry of news. U.S. Housing Starts unexpectedly fell in December, pulled down by a lack of activity for single-family dwellings. Starts for single-family homes fell last month, but multifamily starts were up over 12%. The Producer Price Index was up for the third month in a row, versus expectations of being unchanged. The core rate, ex-food & energy, was unchanged, lower than expected.
But perhaps more important than the economic news were the earning results this morning. Morgan Stanley earned $413 million in the 4th quarter, but it was still below estimates. Wells Fargo swung to a profit in the fourth quarter on net income of $2.82 billion, versus Bank of America’s loss of $5.2 billion due to taking a hit from higher credit costs and TARP repayments. And the Bank of New York Mellon profit beat estimates, hitting almost $600 million.
Rates are unchanged this morning.
But perhaps more important than the economic news were the earning results this morning. Morgan Stanley earned $413 million in the 4th quarter, but it was still below estimates. Wells Fargo swung to a profit in the fourth quarter on net income of $2.82 billion, versus Bank of America’s loss of $5.2 billion due to taking a hit from higher credit costs and TARP repayments. And the Bank of New York Mellon profit beat estimates, hitting almost $600 million.
Rates are unchanged this morning.
Tuesday, January 19, 2010
Mortgage Market Review - 1/19/10
This Morning…Tuesday, January 19, 2010:
Not much happening this morning as mortgage bonds open lower from Friday matching investor pull back pricing due to Monday’s market closure. Treasuries are trading lower as well after two days of gains. Not much in the way of economic data was released today but tomorrow brings producer inflation data and jobless claim numbers are due on Thursday. Bonds are firming a bit from earlier morning losses and the Dow is up about 80-points at the moment. Trading conditions are still thin so be prepared for continued volatility.
Last Week:
Last week was a good week for the bond and mortgage markets as bond prices rose, pushing mortgage interest rates lower. The bond market rallied nicely Tuesday following moves by China to curb growth. Oil prices fell almost immediately providing a much-needed reprieve following the recent run up in prices tied to severe cold weather across the US. The consumer price index data showed tame inflation, which also helped rates improve. Industrial Production, was up for the 6th time in a row and Capacity Utilization hit its highest level in a year.
This Week:
This week has only four business days, but there is a fair amount of economic news. We have zip today, but the Producer Price Index (PPI) on Wednesday, as well as Housing Starts & Building Permits. Thursday we have Jobless Claims, Leading Economic Indicators, and the Philly Fed Index, as well as yet again another auction announcement for the following week.
EconomicIndicator
Martin Luther King Day
Monday, Jan. 18
Important. Shortened trading week may result in volatility when trading resumes Tuesday.
Producer Price Index
Wednesday, Jan. 20,8:30 am, et
Unchanged, Core up 0.2%
Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates.
Housing Starts
Wednesday, Jan. 20,8:30 am, et
Up 1.0%
Important. A measure of housing sector strength. Weakness may lead to lower rates.
Weekly Jobless Claims
Thursday, Jan. 21,8:30 am, et
445k
Moderately Important. An indication of employment. Higher figures may result in lower rates.
Leading Economic Indicators
Thursday, Jan. 21,10:00 am, et
Up 0.5%
Important. An indication of future economic activity. Weakness may lead to lower rates.
Philadelphia Fed Survey
Thursday, Jan. 21,10:00 am, et
18.2
Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Market Forecast:
The inflation data Wednesday will be the most important economic release this week. Signs of stronger than expected inflation would not be good for mortgage interest rates. Direction for the bond and mortgage markets rests a lot this week on how the equity markets do; the stock market looks vulnerable to selling, if stocks decline in a correctional move the bond and mortgage markets will be the beneficiaries and continue to improve. We are not however, expecting a major decline in interest rates and see any improvement more a correctional move after the huge and swift increase in rates in Dec. As long as the outlook for economic recovery remains as solid as it is currently lower rates are highly unlikely and suggest taking advantage of any further decline in rates. The Fed is on the recovery bandwagon; based on the Fed's Beige Book, its report on the economy, the Fed remains convinced the economy will continue to recover but at a very slow pace.
Some Humor: (just slightly inappropriate)
A woman meets a man in a bar. They talk; they connect; they end up leaving together.They get back to his place, and as he shows her around his apartment. She notices that one wall of his bedroom is completely filled with soft, sweet, cuddly teddy bears. It was obvious that he had taken quite some time to lovingly arrange them and she was immediately touched by the amount of thought he had put into organizing the display. There were small bears all along the bottom shelf, medium-sized bears covering the length of the middle shelf, and huge, enormous bears running all the way along the top shelf. They share a bottle of wine and continue talking and, after awhile, she finds herself thinking, “Maybe, this guy could be the one! Maybe he could be the future father of my children?”They kiss, the passion builds, and he romantically lifts her in his arms and carries her into his bedroom where proceed from there. She is so overwhelmed that she responds with more passion, more creativity, and more heat than she has ever known.After an intense, explosive night of raw passion with this sensitive guy, they are lying there together in the afterglow. The woman rolls over, gently strokes his chest and asks coyly, “Well, how was it?”The guy gently smiles at her, looks deeply into her eyes, and says, “Help yourself to any prize ... from the middle shelf.”
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.
Not much happening this morning as mortgage bonds open lower from Friday matching investor pull back pricing due to Monday’s market closure. Treasuries are trading lower as well after two days of gains. Not much in the way of economic data was released today but tomorrow brings producer inflation data and jobless claim numbers are due on Thursday. Bonds are firming a bit from earlier morning losses and the Dow is up about 80-points at the moment. Trading conditions are still thin so be prepared for continued volatility.
Last Week:
Last week was a good week for the bond and mortgage markets as bond prices rose, pushing mortgage interest rates lower. The bond market rallied nicely Tuesday following moves by China to curb growth. Oil prices fell almost immediately providing a much-needed reprieve following the recent run up in prices tied to severe cold weather across the US. The consumer price index data showed tame inflation, which also helped rates improve. Industrial Production, was up for the 6th time in a row and Capacity Utilization hit its highest level in a year.
This Week:
This week has only four business days, but there is a fair amount of economic news. We have zip today, but the Producer Price Index (PPI) on Wednesday, as well as Housing Starts & Building Permits. Thursday we have Jobless Claims, Leading Economic Indicators, and the Philly Fed Index, as well as yet again another auction announcement for the following week.
EconomicIndicator
Martin Luther King Day
Monday, Jan. 18
Important. Shortened trading week may result in volatility when trading resumes Tuesday.
Producer Price Index
Wednesday, Jan. 20,8:30 am, et
Unchanged, Core up 0.2%
Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates.
Housing Starts
Wednesday, Jan. 20,8:30 am, et
Up 1.0%
Important. A measure of housing sector strength. Weakness may lead to lower rates.
Weekly Jobless Claims
Thursday, Jan. 21,8:30 am, et
445k
Moderately Important. An indication of employment. Higher figures may result in lower rates.
Leading Economic Indicators
Thursday, Jan. 21,10:00 am, et
Up 0.5%
Important. An indication of future economic activity. Weakness may lead to lower rates.
Philadelphia Fed Survey
Thursday, Jan. 21,10:00 am, et
18.2
Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Market Forecast:
The inflation data Wednesday will be the most important economic release this week. Signs of stronger than expected inflation would not be good for mortgage interest rates. Direction for the bond and mortgage markets rests a lot this week on how the equity markets do; the stock market looks vulnerable to selling, if stocks decline in a correctional move the bond and mortgage markets will be the beneficiaries and continue to improve. We are not however, expecting a major decline in interest rates and see any improvement more a correctional move after the huge and swift increase in rates in Dec. As long as the outlook for economic recovery remains as solid as it is currently lower rates are highly unlikely and suggest taking advantage of any further decline in rates. The Fed is on the recovery bandwagon; based on the Fed's Beige Book, its report on the economy, the Fed remains convinced the economy will continue to recover but at a very slow pace.
Some Humor: (just slightly inappropriate)
A woman meets a man in a bar. They talk; they connect; they end up leaving together.They get back to his place, and as he shows her around his apartment. She notices that one wall of his bedroom is completely filled with soft, sweet, cuddly teddy bears. It was obvious that he had taken quite some time to lovingly arrange them and she was immediately touched by the amount of thought he had put into organizing the display. There were small bears all along the bottom shelf, medium-sized bears covering the length of the middle shelf, and huge, enormous bears running all the way along the top shelf. They share a bottle of wine and continue talking and, after awhile, she finds herself thinking, “Maybe, this guy could be the one! Maybe he could be the future father of my children?”They kiss, the passion builds, and he romantically lifts her in his arms and carries her into his bedroom where proceed from there. She is so overwhelmed that she responds with more passion, more creativity, and more heat than she has ever known.After an intense, explosive night of raw passion with this sensitive guy, they are lying there together in the afterglow. The woman rolls over, gently strokes his chest and asks coyly, “Well, how was it?”The guy gently smiles at her, looks deeply into her eyes, and says, “Help yourself to any prize ... from the middle shelf.”
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, January 15, 2010
1/15/10
Good morning. Yesterday Retail Sales, Jobless Claims, and a good 30-yr bond auction all contributed to an “up day” in bonds with rates going down a bit. Jobless Claims were up, although continuing claims were down and Import Prices for December were unchanged, helping the inflation picture.
This morning we had the Consumer Price Index. We headed in to it with estimates of it being +.2%, and it came in at +.1%, a shade less inflationary than expected. We will also see Industrial Production and Capacity Utilization, along with the University of Michigan’s Consumer Sentiment Survey. With that in mind mortgage prices are slightly better by about .125.
This morning we had the Consumer Price Index. We headed in to it with estimates of it being +.2%, and it came in at +.1%, a shade less inflationary than expected. We will also see Industrial Production and Capacity Utilization, along with the University of Michigan’s Consumer Sentiment Survey. With that in mind mortgage prices are slightly better by about .125.
1/14/10
Good morning. The market did not do so well yesterday and in fact saw some intra-day price changes from some investors. The 10-yr sale went “ok”, and today we have 30-yr bonds to wade through. Also today we will have Jobless Claims and Retail Sales, along with Import/Export Prices. Ahead of those numbers the market were pretty quiet. As it turns out, Retail Sales unexpectedly fell in December by 0.3% last month, the first decline in three months, after rising by an upwardly revised 1.8 percent in November. This morning mortgage prices are slightly better than the close Wednesday.
1/13/10
Good morning. We had a nice rate improvement yesterday, starting Monday night with some banking news out of China, a widening Trade Deficit due to oil prices, a down stock market due to potential corporate weakness, and following through to a decent 3-yr Treasury auction.
It is a new day, however, and we’re looking at a 10 year note auction today and a 30 tomorrow. The auction, and the Fed’s Beige Book this afternoon, is the only real economic news expected to push the markets around a little today. Currently mortgage prices are roughly unchanged from Tuesday afternoon.
It is a new day, however, and we’re looking at a 10 year note auction today and a 30 tomorrow. The auction, and the Fed’s Beige Book this afternoon, is the only real economic news expected to push the markets around a little today. Currently mortgage prices are roughly unchanged from Tuesday afternoon.
1/12/10
Yesterday was a bit of a slow day in rate-land, with the only volatility coming after “hawkish” comments from Fed Governor Hoenig who said that an unemployment rate of 10% does not preclude the Fed from raising rates. This week becomes busier as we approach Friday. Thursday and Friday contain news on inflation, manufacturing, and retail sales. And besides the standard news we have the auction and several Fed speakers. (The next Fed meeting starts on January 26th.) Today we have the Treasury’s 3-yr auction. We will have the Trade Balance figures at 8:30AM EST, and then the Fed’s Beige Book release at 2PM EST, but ahead of those items dealers are reporting a wave of solid buying, and rates are down somewhat this morning.
Monday, January 11, 2010
Mortgage Market Review - 1/11/10
This Morning…Monday, January 11, 2010:
It’s quiet in the markets this morning with no economic releases scheduled. Treasuries and mortgage rates opened slightly better than Friday’s close.
Last Week:
Mortgage bond prices rose last week pushing mortgage rates slightly higher. The bond market was buoyed by the announcement that US Treasury increased the credit lines of Fannie Mae and Freddie Mac a total of $400 billion. This was a signal to investors that those entities are "too big to fail" as viewed by the Treasury. We saw some weakness Thursday afternoon as retailers reported stronger than expected holiday sales. Also, Nov pending home sales plunged 16% which was 5 times greater than forecasts. The overall unemployment rate at 10.0% was unchanged from Nov. This can be spun in any direction, but we come back the reality that jobs are not being created, just firings have slowed. Surprisingly, the report was somewhat bond friendly.
This Week:
This week the economic calendar is pretty light until later in the week. Until then we have tomorrow’s Trade Balance figures (usually not a big deal for interest rates) and the Fed's Beige Book on Wednesday. But on Thursday we have Jobless Claims, Import Prices, and Retail Sales. And on Friday we have the Consumer Price Index (CPI), Industrial Production, Capacity Utilization, Consumer Sentiment, and the Empire State Index. Throw in some Treasury auctions Tuesday through Thursday and we could see some volatility.
EconomicIndicator
Trade Data
Tuesday, Jan. 12,8:30 am, et
$34.8 billion deficit
Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
3-year Treasury Note Auction
Tuesday, Jan. 12,1:00 pm, et
None
Important. $40 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Fed "Beige Book"
Wednesday, Jan 13, 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, Jan. 13,1:00 pm, et
None
Important. $21 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Retail Sales
Thursday, Jan. 14,8:30 am, et
Up 0.4%
Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates.
30-year Treasury Bond Auction
Thursday, Jan. 14,1:30 pm, et
None
Important. $13 billion of bonds will be auctioned. Strong demand may lead to lower mortgage rates.
Consumer Price Index
Friday, Jan. 15,8:30 am, et
Up 0.2%,Core up 0.1%
Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates.
Industrial Production
Friday, Jan. 15,9:15 am, et
Up 0.6%
Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates.
Capacity Utilization
Friday, Jan. 15,9:15 am, et
71.8%
Important. A figure above 85% is viewed as inflationary. Weakness lower mortgage interest rates.
U of Michigan Consumer Sentiment
Friday, Jan. 15,10:00 am, et
73.8
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
Market Forecast:
The inflation data Friday will be the most important economic data this week. Signs of stronger than expected inflation would not be good for mortgage interest rates. The Treasury auctions will also dominate trading. If we have stronger than normal foreign demand, it could bode well for the overall level of interest rates and weaker than expected bids would likely result in interest rate increases.
Some Humor: (the very last Christmas joke…I promise!)
Three men died on Christmas Eve and were met by Saint Peter at the pearly gates.
“In honor of this holy season,” Saint Peter said, “You must each possess something that symbolizes Christmas to get into heaven.”
The first man fumbled through his pockets and pulled out a lighter. He flicked it on. “It represents a candle,” he said. “You may pass through the pearly gates,” Saint Peter said.
The second man reached into his pocket and pulled out a set of keys. He shook them and said, “They're bells.”Saint Peter said, “You may pass through the pearly gates.”
The third man started searching desperately through his pockets and finally pulled out a pair of women's panties.
St. Peter looked at the man with a raised eyebrow and asked, “And just what do those symbolize?”The man replied, “These are Carols.”
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.
It’s quiet in the markets this morning with no economic releases scheduled. Treasuries and mortgage rates opened slightly better than Friday’s close.
Last Week:
Mortgage bond prices rose last week pushing mortgage rates slightly higher. The bond market was buoyed by the announcement that US Treasury increased the credit lines of Fannie Mae and Freddie Mac a total of $400 billion. This was a signal to investors that those entities are "too big to fail" as viewed by the Treasury. We saw some weakness Thursday afternoon as retailers reported stronger than expected holiday sales. Also, Nov pending home sales plunged 16% which was 5 times greater than forecasts. The overall unemployment rate at 10.0% was unchanged from Nov. This can be spun in any direction, but we come back the reality that jobs are not being created, just firings have slowed. Surprisingly, the report was somewhat bond friendly.
This Week:
This week the economic calendar is pretty light until later in the week. Until then we have tomorrow’s Trade Balance figures (usually not a big deal for interest rates) and the Fed's Beige Book on Wednesday. But on Thursday we have Jobless Claims, Import Prices, and Retail Sales. And on Friday we have the Consumer Price Index (CPI), Industrial Production, Capacity Utilization, Consumer Sentiment, and the Empire State Index. Throw in some Treasury auctions Tuesday through Thursday and we could see some volatility.
EconomicIndicator
Trade Data
Tuesday, Jan. 12,8:30 am, et
$34.8 billion deficit
Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
3-year Treasury Note Auction
Tuesday, Jan. 12,1:00 pm, et
None
Important. $40 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Fed "Beige Book"
Wednesday, Jan 13, 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, Jan. 13,1:00 pm, et
None
Important. $21 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Retail Sales
Thursday, Jan. 14,8:30 am, et
Up 0.4%
Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates.
30-year Treasury Bond Auction
Thursday, Jan. 14,1:30 pm, et
None
Important. $13 billion of bonds will be auctioned. Strong demand may lead to lower mortgage rates.
Consumer Price Index
Friday, Jan. 15,8:30 am, et
Up 0.2%,Core up 0.1%
Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates.
Industrial Production
Friday, Jan. 15,9:15 am, et
Up 0.6%
Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates.
Capacity Utilization
Friday, Jan. 15,9:15 am, et
71.8%
Important. A figure above 85% is viewed as inflationary. Weakness lower mortgage interest rates.
U of Michigan Consumer Sentiment
Friday, Jan. 15,10:00 am, et
73.8
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
Market Forecast:
The inflation data Friday will be the most important economic data this week. Signs of stronger than expected inflation would not be good for mortgage interest rates. The Treasury auctions will also dominate trading. If we have stronger than normal foreign demand, it could bode well for the overall level of interest rates and weaker than expected bids would likely result in interest rate increases.
Some Humor: (the very last Christmas joke…I promise!)
Three men died on Christmas Eve and were met by Saint Peter at the pearly gates.
“In honor of this holy season,” Saint Peter said, “You must each possess something that symbolizes Christmas to get into heaven.”
The first man fumbled through his pockets and pulled out a lighter. He flicked it on. “It represents a candle,” he said. “You may pass through the pearly gates,” Saint Peter said.
The second man reached into his pocket and pulled out a set of keys. He shook them and said, “They're bells.”Saint Peter said, “You may pass through the pearly gates.”
The third man started searching desperately through his pockets and finally pulled out a pair of women's panties.
St. Peter looked at the man with a raised eyebrow and asked, “And just what do those symbolize?”The man replied, “These are Carols.”
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, January 8, 2010
1/8/10
Overnight we saw rates move a little higher after underperforming yesterday. But then this morning’s unemployment data came in showing that the U.S. unexpectedly lost 85,000 jobs in December (expected unchanged) versus revisions showed payrolls increased the prior month for the first time in almost two years. The headline Unemployment Rate held at 10 percent. So basically the recession may be technically over, but companies are still cautious about making permanent additions to their ranks. The average work week held at 32.2 hours in December, while average weekly earnings rose to $624.16 (up 2.2%). In other news, we still have Wholesale Inventories at 7AM PST, along with a bevy of Fed speakers. There weren’t many fireworks after the number: mortgages rate are just slightly improved from yesterday.
1/7/10
Good morning. Ahead of tomorrow’s unemployment data we had yesterday’s ADP Employment Report (which showed that the private sector dropped 84,000 jobs in December, ADP’s 23rd month in a row of declines – “employment losses are now rapidly diminishing”) and today’s weekly Jobless Claims data. Today’s number showed that the number of U.S. workers filing new applications for unemployment insurance rose less than expected last and the 4-week moving average hit a 16-month low. Yesterday’s jobs data, however, was enough to push rates higher during the day, resulting in several investors changing prices. Ahead of us we still have the supply announcement for next week’s auction of 3's, 10's, 30's and 10yr TIPS, but for now mortgage rates are worse between .125 and .250.
1/6/10
Most rate prices worsened today as mortgage bonds give back some of yesterday’s gains. Initially bonds were slightly positive but then fell back as Treasuries take it on the chin after ISM data reflected expansion and jobless claims fell to their lowest since March. Worse than expected payroll data failed to keep Bonds in positive territory as data continues to paint the picture “things are getting less bad”. Of course data often has nothing to do with market direction as we remain in a day trading environment of profit taking while the Fed continues to prop things up. The market continues its sleepy holiday funk as investors wait for us originators to awaken with some supply.
1/5/10
Good morning. For economic news yesterday we had the ISM Manufacturing Index, which rose in December for the fifth consecutive month and the highest reading since April 2006. Construction Spending in U.S. decreased in November. To balance that number we had Construction Spending at the lowest level since July 2003 and down 19% from a year earlier.
Helping rates this morning is news that the New York Fed purchased $9.3 billion in agency mortgage-backed securities the week before last. Ahead of us today we have Factory Orders for November (expected to rise) and Pending Home Sales, but anyone who cares is waiting for Friday’s unemployment data. Most analysts feel that economic readings are showing improvements and that in many markets the housing sector may have found its bottom. We’re seeing, so far this morning, a bit of an improvement in rates.
Helping rates this morning is news that the New York Fed purchased $9.3 billion in agency mortgage-backed securities the week before last. Ahead of us today we have Factory Orders for November (expected to rise) and Pending Home Sales, but anyone who cares is waiting for Friday’s unemployment data. Most analysts feel that economic readings are showing improvements and that in many markets the housing sector may have found its bottom. We’re seeing, so far this morning, a bit of an improvement in rates.
Monday, January 4, 2010
Mortgage Market Review - 1/4/10
This Morning…Monday, January 4, 2010:
It is back to work this morning after two weeks of thin trading. This morning the stock indexes traded higher, At 9:30 the DJIA opened +80. Today we have the ISM Manufacturing Index which is one of the measures of manufacturing sentiment
Last Week:
It was another bad week for the bond and mortgage markets. Mortgage rates increased approximately ¼-3/8% in the past three weeks. Why are rates where they are? The answer is stronger-than-expected economic news. Thursday morning we learned that Jobless Claims unexpectedly fell by 22,000 to 432,000, which is their lowest level in almost a year and a half. Continuing Claims fell by 57,000. So the thinking goes that “if fewer people are filing jobless claims, the employment picture is starting to look a little rosier, which means that the economy must be doing better…” We also had the ISM Index print its highest level in almost 4 years.
This Week:
This week promises to be a busier week, news-wise, than last. Today we start with the ISM Manufacturing data. Tomorrow we throw in a few Pending Home Sales and Construction Spending numbers, Wednesday ISM Services, Thursday Jobless Claims, and on Friday we have all the Unemployment numbers. This will be the first full week of trading this year. It will be interesting to see how traders react to the recent spike in rates following the various shortened trading sessions.
EconomicIndicator
Construction Spending
Monday, Jan. 4,10:00 am, et
Down 0.5%
Low importance. An indication of economic strength. Weakness may lead to lower rates.
ISM Index
Monday, Jan. 4,10:00 am, et
54.0
Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
Factory Orders
Tuesday, Jan. 5,10:00 am, et
Up 0.5%
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
ADP Employment
Wednesday, Jan. 6,8:30 am, et
-75k
Important. A measure of employment. A larger than expected decrease in jobs may bring lower rates.
Employment
Friday, Jan. 8,8:30 am, et
Unemp. @ 10%,Payrolls unchanged
Very important. An increase in unemployment or a large decrease in payrolls may bring lower rates.
Market Forecast:
Following is a short opinion I read of “The Year Ahead” that I would be of interest to you.
“What will occur in the future, economic recovery or additional weakness will continue to be debated. There is no certainty in predictions. Data can be used to support both sides of the debate. What we can be certain of is the fact that until the economy gains some stability, mortgage interest rates are likely to be volatile. Historically, mortgage interest rates seem to improve slowly. In contrast, when rates increase, it is often fast and furious. One negative day often erases a week of positive improvements.
It is possible for mortgage interest rates to push lower considering the Fed still has a few hundred billion dollars of MBS purchasing left. However, we are in unprecedented times. The Fed has clearly signaled they want rates to remain low but also want to exit the market. The Fed isn’t the only player in the mortgage bond market and there are many others buying and selling the securities. Remember that the Fed does not directly dictate that mortgage interest rates will be at a certain percentage. Rates are determined by the supply and demand for mortgage-backed securities.
The Fed kept rates in check for 2009. The big unknown is how they will exit the market without causing major disturbances this year. While there have been signs of improvement in the housing sector, the last thing we need is higher rates. Without the Fed buying mortgage bonds rates may very well head considerably higher. Now is a great time to take advantage of favorable rates.”
Some Humor:
Four guys are driving cross-country together. One of them claims to be from Idaho, one is from Iowa, one is from Florida, and the last one is from New York. A bit down the road the man who claims to be from Idaho starts to pull potatoes from his bag and throws them out the window. The man from Iowa turns to him and asks, "What the heck are you doing?"
The Idahoan answers, "Man, we have so many of these things in Idaho just laying around on the ground – I'm sick of looking at them!"
A few miles down the road, the man from Iowa begins pulling ears of corn from his bag and throwing them out the window.
The man from Florida asks, "What are you doing that for?"
The man from Iowa replies, "Man, we have so many of these things in Iowa I'm sick of looking at them!"
Inspired by the others, the man from Florida opens the car door and pushes the New Yorker out.
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.
It is back to work this morning after two weeks of thin trading. This morning the stock indexes traded higher, At 9:30 the DJIA opened +80. Today we have the ISM Manufacturing Index which is one of the measures of manufacturing sentiment
Last Week:
It was another bad week for the bond and mortgage markets. Mortgage rates increased approximately ¼-3/8% in the past three weeks. Why are rates where they are? The answer is stronger-than-expected economic news. Thursday morning we learned that Jobless Claims unexpectedly fell by 22,000 to 432,000, which is their lowest level in almost a year and a half. Continuing Claims fell by 57,000. So the thinking goes that “if fewer people are filing jobless claims, the employment picture is starting to look a little rosier, which means that the economy must be doing better…” We also had the ISM Index print its highest level in almost 4 years.
This Week:
This week promises to be a busier week, news-wise, than last. Today we start with the ISM Manufacturing data. Tomorrow we throw in a few Pending Home Sales and Construction Spending numbers, Wednesday ISM Services, Thursday Jobless Claims, and on Friday we have all the Unemployment numbers. This will be the first full week of trading this year. It will be interesting to see how traders react to the recent spike in rates following the various shortened trading sessions.
EconomicIndicator
Construction Spending
Monday, Jan. 4,10:00 am, et
Down 0.5%
Low importance. An indication of economic strength. Weakness may lead to lower rates.
ISM Index
Monday, Jan. 4,10:00 am, et
54.0
Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
Factory Orders
Tuesday, Jan. 5,10:00 am, et
Up 0.5%
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
ADP Employment
Wednesday, Jan. 6,8:30 am, et
-75k
Important. A measure of employment. A larger than expected decrease in jobs may bring lower rates.
Employment
Friday, Jan. 8,8:30 am, et
Unemp. @ 10%,Payrolls unchanged
Very important. An increase in unemployment or a large decrease in payrolls may bring lower rates.
Market Forecast:
Following is a short opinion I read of “The Year Ahead” that I would be of interest to you.
“What will occur in the future, economic recovery or additional weakness will continue to be debated. There is no certainty in predictions. Data can be used to support both sides of the debate. What we can be certain of is the fact that until the economy gains some stability, mortgage interest rates are likely to be volatile. Historically, mortgage interest rates seem to improve slowly. In contrast, when rates increase, it is often fast and furious. One negative day often erases a week of positive improvements.
It is possible for mortgage interest rates to push lower considering the Fed still has a few hundred billion dollars of MBS purchasing left. However, we are in unprecedented times. The Fed has clearly signaled they want rates to remain low but also want to exit the market. The Fed isn’t the only player in the mortgage bond market and there are many others buying and selling the securities. Remember that the Fed does not directly dictate that mortgage interest rates will be at a certain percentage. Rates are determined by the supply and demand for mortgage-backed securities.
The Fed kept rates in check for 2009. The big unknown is how they will exit the market without causing major disturbances this year. While there have been signs of improvement in the housing sector, the last thing we need is higher rates. Without the Fed buying mortgage bonds rates may very well head considerably higher. Now is a great time to take advantage of favorable rates.”
Some Humor:
Four guys are driving cross-country together. One of them claims to be from Idaho, one is from Iowa, one is from Florida, and the last one is from New York. A bit down the road the man who claims to be from Idaho starts to pull potatoes from his bag and throws them out the window. The man from Iowa turns to him and asks, "What the heck are you doing?"
The Idahoan answers, "Man, we have so many of these things in Idaho just laying around on the ground – I'm sick of looking at them!"
A few miles down the road, the man from Iowa begins pulling ears of corn from his bag and throwing them out the window.
The man from Florida asks, "What are you doing that for?"
The man from Iowa replies, "Man, we have so many of these things in Iowa I'm sick of looking at them!"
Inspired by the others, the man from Florida opens the car door and pushes the New Yorker out.
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.
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