Good morning. It’s no secret that many homeowner’s are having serious problems paying their mortgage payments. On March 26th, the administration revamped the Home Affordability Mortgage Program to assist borrowers with modification of their 1st and in some cases, 2nd mortgages. In some cases they are forgiving certain balances of the loans. Information is still coming out, but there is good information at https://www.hmpadmin.com/portal/index.html. Another good site is http://www.makinghomeaffordable.gov/about.html which has an excellent FAQ page.
I hope you enjoy the “review” this week. Please let me know if you have any questions. Thanks for taking the time to look this over. I hope you find it useful and informative. To Your Success!!!!
Fred
This Morning…Monday, March 29, 2010:
The only data for today has already arrived. Personal Income was expected +.2% but came out as unchanged for February. Personal consumption expenditures were expected to rise, and did, coming out at +.3%. After the data, bonds and stocks didn’t do much. Mortgage rates are about unchanged from Friday’s closing levels.
Last Week:
Mortgage bond prices fell last week pushing mortgage interest rates considerably higher. Two of the three Treasury auctions resulted in poor foreign demand for US debt instruments and unfortunately that carried over into the mortgage backed securities market causing prices to fall and rates to rise. A combination of the increasing US Government budget deficit, continued problems with Greece and European debt were the primary culprits, along with some signs that our economy is picking up a little steam (stocks are hitting 18-month highs). The data hurt us with weekly jobless claims coming in better than expected and existing home sales also beating estimates. Durable goods orders data was mixed with ex-transportation figures considerably stronger than expected. Ouch.
This Week:
This week is an interesting one with the Employment Report on Friday as the most important release. Today (as mentioned above) we had Personal Income & Consumption and the PCE Price Index, Tuesday the S&P/Case-Shiller Home Price Index & Consumer Confidence, Wednesday the Chicago Purchasing Managers Index, Thursday we have Initial Jobless Claims, Construction Spending, and the ISM Manufacturing data, and then on Friday we’ll see the employment data. This is a rather peculiar release date since it is Good Friday and all markets except the bond market will be closed. Unemployment is expected to stay unchanged at 9.7%
EconomicIndicator
Personal Income and Outlays
Monday, March 29,8:30 am, et
Up 0.1%,Up 0.3%
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
PCE Prices-Core
Monday, March 29,8:30 am, et
Up 0.1%
Important. An indication of inflationary pressures at the producer level. Weakness may lead to lower rates.
Consumer Confidence
Tuesday, March 30,10:00 am, et
49.0
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
ADP Employment
Wednesday, March 31,8:30 am, et
Up 45k
Important. An indication of employment. Weakness in payrolls may bring lower rates.
Factory Orders
Wednesday, March 31,10:00 am, et
Up 0.5%
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Construction Spending
Thursday, April 1,10:00 am, et
Down 1.0%
Low importance. An indication of economic strength. A significant decrease may lead to lower rates.
ISM Index
Thursday, April 1,10:00 am, et
57.0
Important. A measure of manufacturer sentiment. Weakness may lead to lower mortgage rates.
Employment
Friday, April 2,8:30 am, et
Unemp. @ 9.7%,Payrolls +150k
Very important. An increase in unemployment or weakness in payrolls may bring lower rates.
Market Forecast:
Overall, I expect to see the most movement in rates either Thursday or Friday. Friday is the most important day of the week with the employment numbers being released, but we will likely see a fair amount of movement in rates Thursday morning also. I am expecting tomorrow or Wednesday to be the calmest day of the week, but we should still see some changes to rates those days. In general, it will probably be pretty active week. Also worth noting is that fact that the stock markets will be closed Friday in observance of the Good Friday holiday, but the bond market will open for trading until noon. This will likely create additional volatility in bonds Thursday afternoon and especially Friday morning.
Some Humor:
Two elderly women were out driving in a large car, both could barely see over the dashboard. As they were cruising along, they came to an intersection. The stoplight was red, but they just went on through. The woman in the passenger seat thought to herself "I must be losing it. I could have sworn we just went through a red light."
After a few more minutes, they came to another intersection and the light was red again.
Again, they went right through. The woman in the passenger seat was almost sure that the light had been red but was really concerned that she was losing it. She was getting nervous.
At the next intersection, sure enough, the light was red and they went on through. So, she turned to the other woman and said, "Mildred, do you know that we just ran through three red lights in a row? You could have killed us both!" Mildred turned to her and said, "Crap, am I driving?"
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, March 29, 2010
Friday, March 26, 2010
3/26/10
Mortgage rates stabilized a bit today as mortgage bonds make gains on top of Treasuries, tightening up big time. A less steep yield curve and lower volatility as things are calming down after Wednesday’s perfect storm are helping to stabilize rates this morning. Consumer sentiment data came in better than expected and Greenspan is apparently concerned about our “fiscal situation” and the Obama administration unveiled details to expand the HAMP program incenting investors to do cut loan balances and payments to help unemployed borrowers. Its Friday. Lets hope next week is better for mortgages…
3/24/10
Mortgage securities did receive a little boost yesterday from Treasury's Geithner. Rates and prices improved slightly. We also had Fed Governor Yellen on the tape yesterday, saying that she believes that although the labor market is stabilizing at a high level of unemployment and inflation should stay low, and that the housing market has stalled. And we are in the middle of yet another 3-day period of auctions. With inflation expected to be tame, and the Fed expected to leave short-term rates low for an extended period, the argument can certainly be made to own some fixed-rate securities. This morning we’ve had Durable Goods +.5% for February, versus +3.9% in January and new home sales, expected to be better by 1.9%, fell 2.2%. After the strong news mortgage rates are worse this morning.
3/23/10
Most rate prices improved a bit today as mortgage bonds are trying to hold on to gains from Monday. Treasuries are near unchanged ahead of today’s 2-year auction. Economic data was limited again today in the form of a slightly better than expected drop in existing homes sales for February and a slight advancement of mid Atlantic manufacturing activity. The stock market indices continue to grind higher with the Dow up over 30-points at the moment. Treasury Secretary Geithner is on Capitol Hill discussing the future of Fannie and Freddie. Big stuff. 7 days remain of Fed purchases of MBS. For now we wait.
Monday, March 22, 2010
Mortgage Market Review - 3/22/10
Good morning. I hope you enjoyed the beautiful weather on Saturday and were able to get out and enjoy it. As a reminder, if you are still thinking about purchasing a home, don’t forget that the end of the first time home buyer tax credit is in sight, and I have heard nothing about any extensions. Borrowers need to be in contract by April 30 and close by June 30. The tax credit is available for everyone who is purchasing a home (up to $8K for 1st time buyers and $6,500.00 for current homeowners).
One of the most popular videos on You Tube (with over 2 million hits!) has been the “Embrace Life” video. This started out as an advertisement for seat belts and has turned into an online sensation due to the beauty of the way it states itself. It’s worth a look if you haven’t seen it. It can be found at http://www.youtube.com/watch?v=h-8PBx7isoM. I hope you have a great week. Please let me know if you have any questions and thanks for taking the time to look this over. I hope you find it informative and useful.
Fred
This Morning…Monday, March 22, 2010:
There is no relevant economic data being posted today and the interest rate market is moving with the equities market. This morning, the bond market has opened in positive territory as stocks react negatively to the healthcare bill and concerns about Greece again. The health care bill was passed late yesterday which came as no surprise to the market; the Dems had the votes and used them to pass the most encompassing health bill ever. It was all Dems, with no Republican voting for it. This morning the markets are struggling to figure out which stocks will benefit and which will take a hit. The stock markets have opened slightly in negative ground with the Dow currently down 14 points and the Nasdaq down 3 points. The bond market is up slightly and currently mortgage rates are unchanged from Friday’s close.
Last Week:
Mortgage bond prices rose last week helping mortgage interest rates improve slightly. We started the week on a positive note with rates falling amid tame inflation readings. The producer price index fell 0.6% and the core rose 0.1%. The headline figure was the lowest since July 2009. Weekly jobless claims showed the employment situation remained poor. Unfortunately we saw the market fall a bit pushing rates higher Thursday afternoon following the announcement of the size of the upcoming Treasury auctions and amid fear of future rate hikes.
This Week:
This week we will see the Treasury auctioning off another $118 billion, with the usual questions about demand from foreign investors. Certainly there is little fear of inflation eating away fixed-income earnings. There is no news today, but tomorrow we have Existing Home Sales (expected to be down just under1%) and Wednesday New Home Sales (expected to be up 1.5%). Durable Goods is also scheduled for Wednesday. Thursday is Initial Jobless Claims along with Personal Income and Consumption, and on Friday we have a report on first quarter Gross Domestic Product (GDP) along with Consumer Sentiment from the University of Michigan.
EconomicIndicator
Existing Home Sales
Tuesday, March 23,10:00 am, et
Down 0.9%
Low importance. An indication of mortgage credit demand. A significant decrease may lead to lower rates.
2-year Treasury Note Auction
Tuesday, March 23,1:15 pm, et
None
Important. $44 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Durable Goods Orders
Wednesday, March 24,8:30 am, et
Up 0.5%
Important. An indication of the demand for "big ticket" items. Weakness may lead to lower rates.
New Home Sales
Wednesday, March 24, 10:00 am, et
Up 1.5%
Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
5-year Treasury Note Auction
Wednesday, March 24, 1:15 pm, et
None
Important. $42 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
7-year Treasury Note Auction
Thursday, March 25,1:15 pm, et
None
Important. $32 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Q4 GDP third estimate
Friday, March 26,8:30 am, et
Up 5.8%
Important. The aggregate measure of US economic production. Weakness may lead to lower rates.
U of Michigan Consumer Sentiment
Friday, March 26,10:00 am, et
71
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
Market Forecast:
Overall, it is difficult to label one particular day as the most important of the week. The single most important report will likely be the Durable Goods Orders, but none of the week’s data has the potential to be a major market mover. Supply concerns will continue to weigh heavily upon the bond market with the continued record Treasury auctions. If foreign demand falters mortgage interest rates could be pressured higher. If the stock markets move lower, we should see gains in bonds and improvements in mortgage rates. But, if stocks move higher, pressure in bonds is possible, leading to higher mortgage pricing. I suspect that this week will be a little calmer for mortgage rates than the past couple weeks have been.As I mentioned, the durable goods and gross domestic product (GDP) data will be the most important releases this week and is one the most important reports during any given quarter. GDP is a measure of US economic output and spending. The report is significant in that it provides investors, analysts, traders, and economists with a comprehensive report of the direction of the economy. In addition, it also influences the decisions of Federal Reserve policy makers, Congressional budget employees, and corporate financial planners.
Some Humor:
A man walks into a bar, notices a very large jar on the counter, and sees that it's filled to the rim with $10 bills. He guesses there must be at least ten thousand dollars in it. He approaches the bartender and asks, "What's with the money in the jar?"
"Well..., you pay $10, and if you pass three tests, you get all the money in the jar and the keys to a brand new Lexus."
The man certainly isn't going to pass this up, so he asks, "What are the three tests?"
"You gotta pay first," says the bartender, "those are the rules."
So, after thinking it over a while, the man gives the bartender $10 which he stuffs into the jar.
"Okay," says the bartender, "here's what you need to do. First - You have to drink a whole quart of tequila, in 60 seconds or less, and you can't make a face while doing it.
"Second - There's a pit bull chained in the back with a bad tooth. You have to remove that tooth with your bare hands.
"Third - There's a 90-year old lady upstairs who's never had sex. You have to take care of that problem."
The man is stunned! "I know I paid my $10 -- but I'm not an idiot! I won't do it! You'd have to be nuts to drink a quart of tequila and then do all those other things!"
"Your call," says the bartender, "but, your money stays where it is."
As time goes on, the man has a few more drinks and finally says, "Where's the damn tequila?!"He grabs the bottle with both hands and drinks it as fast as he can. Tears stream down both cheeks -- but he doesn't make a face -- and he drinks it in 58 seconds!
Next, he staggers out the back door where he sees the pit bull chained to a pole. Soon, the people inside the bar hear loud growling, screaming, and sounds of a terrible fight -- then nothing but silence!
Just when they think that the man surely must be dead, he staggers back into the bar. His clothes are ripped to shreds and he's bleeding from bites and gashes all over his body. He drunkenly says, "Now..., where's that old woman with the bad tooth?"
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.
One of the most popular videos on You Tube (with over 2 million hits!) has been the “Embrace Life” video. This started out as an advertisement for seat belts and has turned into an online sensation due to the beauty of the way it states itself. It’s worth a look if you haven’t seen it. It can be found at http://www.youtube.com/watch?v=h-8PBx7isoM. I hope you have a great week. Please let me know if you have any questions and thanks for taking the time to look this over. I hope you find it informative and useful.
Fred
This Morning…Monday, March 22, 2010:
There is no relevant economic data being posted today and the interest rate market is moving with the equities market. This morning, the bond market has opened in positive territory as stocks react negatively to the healthcare bill and concerns about Greece again. The health care bill was passed late yesterday which came as no surprise to the market; the Dems had the votes and used them to pass the most encompassing health bill ever. It was all Dems, with no Republican voting for it. This morning the markets are struggling to figure out which stocks will benefit and which will take a hit. The stock markets have opened slightly in negative ground with the Dow currently down 14 points and the Nasdaq down 3 points. The bond market is up slightly and currently mortgage rates are unchanged from Friday’s close.
Last Week:
Mortgage bond prices rose last week helping mortgage interest rates improve slightly. We started the week on a positive note with rates falling amid tame inflation readings. The producer price index fell 0.6% and the core rose 0.1%. The headline figure was the lowest since July 2009. Weekly jobless claims showed the employment situation remained poor. Unfortunately we saw the market fall a bit pushing rates higher Thursday afternoon following the announcement of the size of the upcoming Treasury auctions and amid fear of future rate hikes.
This Week:
This week we will see the Treasury auctioning off another $118 billion, with the usual questions about demand from foreign investors. Certainly there is little fear of inflation eating away fixed-income earnings. There is no news today, but tomorrow we have Existing Home Sales (expected to be down just under1%) and Wednesday New Home Sales (expected to be up 1.5%). Durable Goods is also scheduled for Wednesday. Thursday is Initial Jobless Claims along with Personal Income and Consumption, and on Friday we have a report on first quarter Gross Domestic Product (GDP) along with Consumer Sentiment from the University of Michigan.
EconomicIndicator
Existing Home Sales
Tuesday, March 23,10:00 am, et
Down 0.9%
Low importance. An indication of mortgage credit demand. A significant decrease may lead to lower rates.
2-year Treasury Note Auction
Tuesday, March 23,1:15 pm, et
None
Important. $44 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Durable Goods Orders
Wednesday, March 24,8:30 am, et
Up 0.5%
Important. An indication of the demand for "big ticket" items. Weakness may lead to lower rates.
New Home Sales
Wednesday, March 24, 10:00 am, et
Up 1.5%
Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.
5-year Treasury Note Auction
Wednesday, March 24, 1:15 pm, et
None
Important. $42 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
7-year Treasury Note Auction
Thursday, March 25,1:15 pm, et
None
Important. $32 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Q4 GDP third estimate
Friday, March 26,8:30 am, et
Up 5.8%
Important. The aggregate measure of US economic production. Weakness may lead to lower rates.
U of Michigan Consumer Sentiment
Friday, March 26,10:00 am, et
71
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
Market Forecast:
Overall, it is difficult to label one particular day as the most important of the week. The single most important report will likely be the Durable Goods Orders, but none of the week’s data has the potential to be a major market mover. Supply concerns will continue to weigh heavily upon the bond market with the continued record Treasury auctions. If foreign demand falters mortgage interest rates could be pressured higher. If the stock markets move lower, we should see gains in bonds and improvements in mortgage rates. But, if stocks move higher, pressure in bonds is possible, leading to higher mortgage pricing. I suspect that this week will be a little calmer for mortgage rates than the past couple weeks have been.As I mentioned, the durable goods and gross domestic product (GDP) data will be the most important releases this week and is one the most important reports during any given quarter. GDP is a measure of US economic output and spending. The report is significant in that it provides investors, analysts, traders, and economists with a comprehensive report of the direction of the economy. In addition, it also influences the decisions of Federal Reserve policy makers, Congressional budget employees, and corporate financial planners.
Some Humor:
A man walks into a bar, notices a very large jar on the counter, and sees that it's filled to the rim with $10 bills. He guesses there must be at least ten thousand dollars in it. He approaches the bartender and asks, "What's with the money in the jar?"
"Well..., you pay $10, and if you pass three tests, you get all the money in the jar and the keys to a brand new Lexus."
The man certainly isn't going to pass this up, so he asks, "What are the three tests?"
"You gotta pay first," says the bartender, "those are the rules."
So, after thinking it over a while, the man gives the bartender $10 which he stuffs into the jar.
"Okay," says the bartender, "here's what you need to do. First - You have to drink a whole quart of tequila, in 60 seconds or less, and you can't make a face while doing it.
"Second - There's a pit bull chained in the back with a bad tooth. You have to remove that tooth with your bare hands.
"Third - There's a 90-year old lady upstairs who's never had sex. You have to take care of that problem."
The man is stunned! "I know I paid my $10 -- but I'm not an idiot! I won't do it! You'd have to be nuts to drink a quart of tequila and then do all those other things!"
"Your call," says the bartender, "but, your money stays where it is."
As time goes on, the man has a few more drinks and finally says, "Where's the damn tequila?!"He grabs the bottle with both hands and drinks it as fast as he can. Tears stream down both cheeks -- but he doesn't make a face -- and he drinks it in 58 seconds!
Next, he staggers out the back door where he sees the pit bull chained to a pole. Soon, the people inside the bar hear loud growling, screaming, and sounds of a terrible fight -- then nothing but silence!
Just when they think that the man surely must be dead, he staggers back into the bar. His clothes are ripped to shreds and he's bleeding from bites and gashes all over his body. He drunkenly says, "Now..., where's that old woman with the bad tooth?"
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, March 19, 2010
3/19/10
As opposed to today, which has no scheduled economic news (aside from many folks watching the results of the NCAA basketball tournament), yesterday we had quite a bit. The CPI came out at unchanged in February, slightly less inflationary than expected. The core rate, ex-food and energy, was +.1%, as expected. Year-over-year numbers for CPI showed an increase that was well within expectations and certainly indicative of a suitable amount of inflation at the consumer level. Initial claims for jobless insurance came out about as expected at 457,000, with continuing claims coming in at 4.579 million. Later in the morning we also saw the Conference Board’s Leading Economic Indicators increase for the 11th straight month – impressive, and consistent with the belief that the economy has bottomed out and is slowly strengthening. The “Philly Fed” came out slightly stronger than expected, which also helped the equity markets but to the detriment of bonds. In fact, stocks have improved for 8 straight days.
With no news today, we find mortgage rates slightly worse this morning.
With no news today, we find mortgage rates slightly worse this morning.
3/18/10
Most rate prices are slightly worse as mortgage bonds are unable to hold onto yesterday’s grind higher. Minimal selling, a flatter yield curve and lower volatility is helping MBS perform well this week despite the impending Fed exit and repeated days of stock market gains. Another bit of bond friendly data was released today with an unchanged consumer price index reading suggesting inflation is well contained. Still ugly initial jobless claims and a wider account deficit were reported as well. Leading economic indicators came in as expected and the Philly Fed survey suggested improved manufacturing conditions and employment despite the weather issues. Following this release we are seeing some pressure on bonds as Treasuries are showing weakness, taking some wind out of mortgages sending them into negative territory. Today we find much Fed speak defending their role in regulating financial institutions against proposed legislation that would limit their domain to only the larger banks. Meanwhile, the Fed has a mere 9 business days left as the backstop bid for MBS…
3/17/10
In honor of St. Patrick’s Day…
Paddy was driving down the street in a sweat because he had an important meeting and couldn't find a parking place. Looking up to heaven he said, “Lord take pity on me. If you find me a parking place I will go to Mass every Sunday for the rest of me life and give up me Irish whiskey!”Miraculously, a parking place appeared.Paddy looked up again and said, “Never mind, I found one.”
The FOMC’s statement yesterday didn’t surprise anyone as they will maintain the current Fed rate for an “extended period.” Since markets don’t like surprises, and there were none, rates stayed about the same though there was improvement in the stock market.
For this morning’s market, ahead of the Producer Price Index, rates were down and stock market futures were pointing to yet another improvement. The February PPI was -.6%, mostly due to energy costs; ex-food and energy the core rate was +.1% (as expected). The year-over-year numbers were also satisfactory, and overall it does appear that inflation is not a big deal. After the numbers we find mortgage prices a shade worse.
Nothing left today but Bernanke's testimony this afternoon and watching the equity markets.
Paddy was driving down the street in a sweat because he had an important meeting and couldn't find a parking place. Looking up to heaven he said, “Lord take pity on me. If you find me a parking place I will go to Mass every Sunday for the rest of me life and give up me Irish whiskey!”Miraculously, a parking place appeared.Paddy looked up again and said, “Never mind, I found one.”
The FOMC’s statement yesterday didn’t surprise anyone as they will maintain the current Fed rate for an “extended period.” Since markets don’t like surprises, and there were none, rates stayed about the same though there was improvement in the stock market.
For this morning’s market, ahead of the Producer Price Index, rates were down and stock market futures were pointing to yet another improvement. The February PPI was -.6%, mostly due to energy costs; ex-food and energy the core rate was +.1% (as expected). The year-over-year numbers were also satisfactory, and overall it does appear that inflation is not a big deal. After the numbers we find mortgage prices a shade worse.
Nothing left today but Bernanke's testimony this afternoon and watching the equity markets.
3/16/10
Most rate prices are a bit improved this morning as mortgage bonds hold onto modest improvements from Monday. Treasuries are helping boost mortgages ahead of the Fed’s rate decision due at 11:15am today. The Fed is expected to leave the funds rate unchanged and reiterate its “extended period” language of keeping it at its current range of 0 - .250% and while some are voicing concern over this policy, today’s economic news gives the current Fed stance breathing room in the form of lower import prices (inflation from abroad) and poor housing starts. And while weather appears to be a large part of the housing start data, it is clear the housing market in general is still in the proverbial toilet with a looming wave of foreclosures coming. A trifecta of Obama economic advisors voiced a similar view of the employment picture, predicting the jobless rate will remain elevated for an extended period of time. Given this environment, the Fed will be in no hurry to raise rates. Stay tuned for the release as the market will parse the verbiage carefully and volatility could result. However, few expect much market moving statements including anything to alter the planned expiration of the MBS purchase program.
Monday, March 15, 2010
Mortgage Market Review - 3/15/10
Good morning. I found a pretty funny graph online. It is the water consumption in Edmonton during the US/Canada hockey game. You’ll notice that most everyone waited to go to the bathroom while the game was being played. There’s a HUGE jump in the water usage right after the medal ceremony. Check it out at http://www.patspapers.com/blog/item/what_if_everybody_flushed_at_once_Edmonton_water_gold_medal_hockey_game/
As I mentioned in the Daily Updates last week (email me to subscribe!), foreclosure filings increased in February at “only” a 6% year-over-year rate, the slowest in four years, and actually declined from January’s number. Nevada was still #1” for the 38th month in a row: 1 in every 102 Nevada homes received a filing, more than four times the national rate. It’s a sad situation. I hope you have a great day today. Thanks for taking the time to read this over. I hope you find it useful and informative. Please let me know if you have any questions.
Fred
This Morning…Monday, March 15, 2010:
Somewhat of a quiet start this morning; At 9:30 the stock market opened fractionally better, after trading lower all morning the DJIA opened a little better but the NASDAQ and S&P were slightly weaker. Not much in the news today, February industrial production, expected unchanged, was up 0.1%. There was no reaction to the report in stocks or bonds.
Last Week:
There wasn’t too much to report last week. Mortgage bond prices fell, applying slight upward pressure on home loan rates. The market remained very volatile within a narrow range. With the lack of data the first portion of the week, oil prices factored into trading. Oil remained above $80 a barrel, which reignited inflation concerns. The retail sales report released Friday was much stronger than expected, indicating the US economy may be getting stronger. This had a slightly negative impact on rates.
This Week:
As opposed to last week, this week is full of scheduled economic news to move the equity and bond markets, the most important being the inflation twins, PPI and CPI. Today we have the Empire State Manufacturing Survey, along with Industrial Production and Capacity Utilization. Tomorrow we have some Import & Export numbers, and New Residential Construction. Wednesday is the Producer Price Index; Thursday is Initial Claims, the Consumer Price Index, and the Philly Fed. The Fed meeting Tuesday afternoon will be the most important event this week. The inflation data from both the consumer and producer sides will also take center stage. Signs of inflation are generally not received well by the mortgage bond market. If inflation remains in check, mortgage bonds could benefit.
EconomicIndicator
Industrial Production
Monday, March 15,9:15 am, et
Up 0.1%
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Capacity Utilization
Monday, March 15,9:15 am, et
72.3%
Important. A figure above 85% is viewed as inflationary. A decrease may lead to lower mortgage interest rates.
Housing Starts
Tuesday, March 16,8:30 am, et
Down 0.6%
Important. A measure of housing sector strength. A larger than expected decrease may lead to lower rates.
Fed Meeting Adjourns
Tuesday, March 16,2:15 pm, et
No change
Important. Few expect the Fed to raise rates, but some volatility may surround the adjournment of this meeting.
Producer Price Index
Wednesday, March 17,8:30 am, et
Unchanged,Core up 0.1%
Important. An indication of inflationary pressures at the producer level. Decreases may lead to lower rates.
Consumer Price Index
Thursday, March 18,8:30 am, et
Unchanged,Core up 0.1%
Important. A measure of inflation at the consumer level. Lower than expected increases may lead to lower rates.
Leading Economic Indicators
Thursday, March 18,10:00 am, et
Up 0.2%
Important. An indication of future economic activity. A smaller increase may lead to lower rates.
Philadelphia Fed Survey
Thursday, March 18,10:00 am, et
17.5
Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Market Forecast:
Overall, look for Thursday to be the most important day of the week due to the CPI release, but Tuesday’s FOMC meeting can also heavily influence the markets. Wednesday may also be an active day for rates with the PPI on tap. Friday will probably be the calmest day for mortgage rates, but it appears there is a good possibility of seeing plenty of movement in rates the next several days.
The clock is ticking on the end of the MBS buying by the Fed, and the expiration of the homebuyers tax credit at the end of April. With the government exiting direct assistance to the mortgage and housing markets there are many worried it will curtail any additional improvement in the sector as mortgage interest rates will increase and with no additional incentives would-be borrowers will back away. It all depends on the employment sector; if new jobs begin to appear that would offset the loss of the homeowners tax credit. We are already hearing some interesting forecasts for the employment estimates, one economist at Morgan Stanley is forecasting 300K new jobs created in March. If he is correct markets will take it and run, interest rates will increase and equity markets will rally. Jobs are the key to the housing sector's rebound; until the employment markets stabilize the economic outlook will remain clouded.
Some Humor (slightly off color):
A farmer stopped by the local mechanic shop to have his truck fixed. They couldn't do it while he waited, so he said he didn't live far and would just walk home.
On the way he stopped at the hardware store and bought a bucket and a gallon of paint. He then stopped by the feed store and picked up a couple of chickens and a goose. However, struggling outside the store he now had a problem - how to carry his entire purchases home.
While he was scratching his head he was approached by a little old lady who told him she was lost. She asked, "Can you tell me how to get to 1603 Mockingbird Lane?"
The farmer said, "Well, as a matter of fact, my farm is very close to that house. I would walk you there, but I can't carry all of this."
The old lady suggested, "Why don't you put the can of paint in the bucket. Carry the bucket in one hand, put a chicken under each arm and carry the goose in your other hand?"
"Why, thank you very much,” he said, and proceeded to walk the old girl home.
On the way he says, "Let's take a short cut and go down this alley. We'll be there in no time." The little old lady looked him over cautiously, and then said, "I am a lonely widow without a husband to defend me. How do I know that when we get in the alley you won't hold me up against the wall and have your way with me?"
The farmer said, "Holy smokes lady! I'm carrying a bucket, a gallon of paint, two chickens and a goose. How in the world could I possibly hold you up against the wall and do that?"
The old lady replied, "Set the goose down, cover him with the bucket, put the paint on top of the bucket, and I'll hold the chickens.”
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.
As I mentioned in the Daily Updates last week (email me to subscribe!), foreclosure filings increased in February at “only” a 6% year-over-year rate, the slowest in four years, and actually declined from January’s number. Nevada was still #1” for the 38th month in a row: 1 in every 102 Nevada homes received a filing, more than four times the national rate. It’s a sad situation. I hope you have a great day today. Thanks for taking the time to read this over. I hope you find it useful and informative. Please let me know if you have any questions.
Fred
This Morning…Monday, March 15, 2010:
Somewhat of a quiet start this morning; At 9:30 the stock market opened fractionally better, after trading lower all morning the DJIA opened a little better but the NASDAQ and S&P were slightly weaker. Not much in the news today, February industrial production, expected unchanged, was up 0.1%. There was no reaction to the report in stocks or bonds.
Last Week:
There wasn’t too much to report last week. Mortgage bond prices fell, applying slight upward pressure on home loan rates. The market remained very volatile within a narrow range. With the lack of data the first portion of the week, oil prices factored into trading. Oil remained above $80 a barrel, which reignited inflation concerns. The retail sales report released Friday was much stronger than expected, indicating the US economy may be getting stronger. This had a slightly negative impact on rates.
This Week:
As opposed to last week, this week is full of scheduled economic news to move the equity and bond markets, the most important being the inflation twins, PPI and CPI. Today we have the Empire State Manufacturing Survey, along with Industrial Production and Capacity Utilization. Tomorrow we have some Import & Export numbers, and New Residential Construction. Wednesday is the Producer Price Index; Thursday is Initial Claims, the Consumer Price Index, and the Philly Fed. The Fed meeting Tuesday afternoon will be the most important event this week. The inflation data from both the consumer and producer sides will also take center stage. Signs of inflation are generally not received well by the mortgage bond market. If inflation remains in check, mortgage bonds could benefit.
EconomicIndicator
Industrial Production
Monday, March 15,9:15 am, et
Up 0.1%
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Capacity Utilization
Monday, March 15,9:15 am, et
72.3%
Important. A figure above 85% is viewed as inflationary. A decrease may lead to lower mortgage interest rates.
Housing Starts
Tuesday, March 16,8:30 am, et
Down 0.6%
Important. A measure of housing sector strength. A larger than expected decrease may lead to lower rates.
Fed Meeting Adjourns
Tuesday, March 16,2:15 pm, et
No change
Important. Few expect the Fed to raise rates, but some volatility may surround the adjournment of this meeting.
Producer Price Index
Wednesday, March 17,8:30 am, et
Unchanged,Core up 0.1%
Important. An indication of inflationary pressures at the producer level. Decreases may lead to lower rates.
Consumer Price Index
Thursday, March 18,8:30 am, et
Unchanged,Core up 0.1%
Important. A measure of inflation at the consumer level. Lower than expected increases may lead to lower rates.
Leading Economic Indicators
Thursday, March 18,10:00 am, et
Up 0.2%
Important. An indication of future economic activity. A smaller increase may lead to lower rates.
Philadelphia Fed Survey
Thursday, March 18,10:00 am, et
17.5
Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.
Market Forecast:
Overall, look for Thursday to be the most important day of the week due to the CPI release, but Tuesday’s FOMC meeting can also heavily influence the markets. Wednesday may also be an active day for rates with the PPI on tap. Friday will probably be the calmest day for mortgage rates, but it appears there is a good possibility of seeing plenty of movement in rates the next several days.
The clock is ticking on the end of the MBS buying by the Fed, and the expiration of the homebuyers tax credit at the end of April. With the government exiting direct assistance to the mortgage and housing markets there are many worried it will curtail any additional improvement in the sector as mortgage interest rates will increase and with no additional incentives would-be borrowers will back away. It all depends on the employment sector; if new jobs begin to appear that would offset the loss of the homeowners tax credit. We are already hearing some interesting forecasts for the employment estimates, one economist at Morgan Stanley is forecasting 300K new jobs created in March. If he is correct markets will take it and run, interest rates will increase and equity markets will rally. Jobs are the key to the housing sector's rebound; until the employment markets stabilize the economic outlook will remain clouded.
Some Humor (slightly off color):
A farmer stopped by the local mechanic shop to have his truck fixed. They couldn't do it while he waited, so he said he didn't live far and would just walk home.
On the way he stopped at the hardware store and bought a bucket and a gallon of paint. He then stopped by the feed store and picked up a couple of chickens and a goose. However, struggling outside the store he now had a problem - how to carry his entire purchases home.
While he was scratching his head he was approached by a little old lady who told him she was lost. She asked, "Can you tell me how to get to 1603 Mockingbird Lane?"
The farmer said, "Well, as a matter of fact, my farm is very close to that house. I would walk you there, but I can't carry all of this."
The old lady suggested, "Why don't you put the can of paint in the bucket. Carry the bucket in one hand, put a chicken under each arm and carry the goose in your other hand?"
"Why, thank you very much,” he said, and proceeded to walk the old girl home.
On the way he says, "Let's take a short cut and go down this alley. We'll be there in no time." The little old lady looked him over cautiously, and then said, "I am a lonely widow without a husband to defend me. How do I know that when we get in the alley you won't hold me up against the wall and have your way with me?"
The farmer said, "Holy smokes lady! I'm carrying a bucket, a gallon of paint, two chickens and a goose. How in the world could I possibly hold you up against the wall and do that?"
The old lady replied, "Set the goose down, cover him with the bucket, put the paint on top of the bucket, and I'll hold the chickens.”
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, March 12, 2010
3/12/10
There wasn’t much news yesterday with the exception of the 30-yr bond sale which went pretty well. This morning’s Retail Sales figure, expected to show a slight decrease, was up .3%, excluding autos were up .8%. Overall, these were strong numbers for a market that hasn’t had much news lately, and should push the equity markets higher. Interest rates, however, as you would expect were not helped by this, and mortgage prices are slightly worse this morning. Have a great weekend.
3/11/10
Most rate prices backed off a bit from yesterday’s re-price as mortgage bonds keep playing back and forth in a narrow range. This tightening is a bit baffling given the Fed’s impending departure from buying as low volatility and low supply appear to be keeping the convexity players and higher yield seekers at bay—for now. This morning we are seeing some pull back to the upper coupons and more selling in the lower so rate sheet rates are under pressure. Today brings the final installment of this week’s auctions with an offering of $13 Billion in 30 year-notes. Yesterday’s 10 year was so-so but good enough to help MBS perform well. Those additional gains have been wiped out so far this morning but let’s see what the auction results around 10am will bring. Stocks are trimming earlier losses as gains in large cap tech shares offset worries about money tightening in China. Better than expected trade balance and jobless claim data was released today with little effect on markets.
3/10/10
Yesterday’s 3-yr T-note auction of $40 billion was the fifth consecutive month of this size, and the auction went well. We’ve had three days (including today) of no real economic news, so supply (mortgage selling and the Treasury auctions) is continuing to be the main driver in the market. We have 10-yr notes to buy today and mortgage prices are about unchanged from Tuesday’s close.
3/9/10
Today we start yet another Treasury auction, with the usual worries about financing our increasing debt. Who will buy the $74 billion? The usual suspects come to mind, and let’s hope that demand is strong because otherwise we could see all rates shoot up in a hurry. Given that there isn’t much data until the end of the week (weekly unemployment claims on Thursday and February retail sales on Friday), these auctions will be important. Mortgage prices are roughly the same this morning.
Monday, March 8, 2010
Mortgage Market Review - 3/8/10
This Morning…Monday, March 8, 2010:
There is weaker start in the rate markets this morning. In Asia stocks rallied on better employment reports, in Europe retail sales were better than expected. At 9:30 the DJIA opened +5. There is no relevant economic data scheduled for release today. This makes it likely that any changes to mortgage pricing will come from swings in stock prices. If the stock markets move higher from current levels, we may see bonds worsen and mortgage rates revise higher later today. If the major stock indexes move lower, mortgage rates may follow suit.
Last Week:
Last week rates were moved around by economic data. The stock market rallied, defying those that continue to expect a big decline. January personal income was less than expected, while personal spending was strong at +0.5%. February auto sales were expected to have increased, and they did; the only company that reported a decline was Toyota. The February employment report last Friday capped a good week for the various economic reports with the unemployment rate holding steady at 9.7%. On the housing front; January pending home sales jumped 12.3% from December. By Friday rates had improved slightly, but then the better-than-expected employment number pushed rates slightly higher
This Week:
This week won’t have as much to chew on and expect stocks to factor into trading the early portion of the week with very little data on tap. The Treasury auctions will be the focus throughout the middle portion of the week. Strong foreign demand would likely help mortgage bonds also. The jobless figures and retail sales data will be the focus for the end of the week.
There is weaker start in the rate markets this morning. In Asia stocks rallied on better employment reports, in Europe retail sales were better than expected. At 9:30 the DJIA opened +5. There is no relevant economic data scheduled for release today. This makes it likely that any changes to mortgage pricing will come from swings in stock prices. If the stock markets move higher from current levels, we may see bonds worsen and mortgage rates revise higher later today. If the major stock indexes move lower, mortgage rates may follow suit.
Last Week:
Last week rates were moved around by economic data. The stock market rallied, defying those that continue to expect a big decline. January personal income was less than expected, while personal spending was strong at +0.5%. February auto sales were expected to have increased, and they did; the only company that reported a decline was Toyota. The February employment report last Friday capped a good week for the various economic reports with the unemployment rate holding steady at 9.7%. On the housing front; January pending home sales jumped 12.3% from December. By Friday rates had improved slightly, but then the better-than-expected employment number pushed rates slightly higher
This Week:
This week won’t have as much to chew on and expect stocks to factor into trading the early portion of the week with very little data on tap. The Treasury auctions will be the focus throughout the middle portion of the week. Strong foreign demand would likely help mortgage bonds also. The jobless figures and retail sales data will be the focus for the end of the week.
Economic Indicator
3-year Treasury Note Auction
Tuesday, March 9,1:15 pm, et
None
Important. $40 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
10-year Treasury Note Auction
Wednesday, March 10,1:15 pm, et
None
Important. $21 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Weekly Jobless Claims
Thursday, March 11,8:30 am, et
450k
Moderately important. An indication of the employment situation. A large increase may bring lower rates.
Trade Data
Thursday, March 11,8:30 am, et
$40.3 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, March 11,1:15 pm, et
None
Important. $13 billion of bonds will be auctioned. Strong demand may lead to lower mortgage rates.
Retail Sales
Friday, March, 12,8:30 am, et
Up 0.1%
Important. A measure of consumer demand. Weakness may lead to lower mortgage rates.
U of Michigan Consumer Sentiment
Friday, March, 12,10:00 am, et
73.6
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
Market Forecast:
Overall, it will likely be another fairly active week in the mortgage market. Friday will probably be the most important day of the week with the Retail Sales report due, while the calmest day could be today or tomorrow, depending on the stock markets. I am expecting to see the most movement in rates the latter part of the week.
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.
3-year Treasury Note Auction
Tuesday, March 9,1:15 pm, et
None
Important. $40 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
10-year Treasury Note Auction
Wednesday, March 10,1:15 pm, et
None
Important. $21 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Weekly Jobless Claims
Thursday, March 11,8:30 am, et
450k
Moderately important. An indication of the employment situation. A large increase may bring lower rates.
Trade Data
Thursday, March 11,8:30 am, et
$40.3 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, March 11,1:15 pm, et
None
Important. $13 billion of bonds will be auctioned. Strong demand may lead to lower mortgage rates.
Retail Sales
Friday, March, 12,8:30 am, et
Up 0.1%
Important. A measure of consumer demand. Weakness may lead to lower mortgage rates.
U of Michigan Consumer Sentiment
Friday, March, 12,10:00 am, et
73.6
Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
Market Forecast:
Overall, it will likely be another fairly active week in the mortgage market. Friday will probably be the most important day of the week with the Retail Sales report due, while the calmest day could be today or tomorrow, depending on the stock markets. I am expecting to see the most movement in rates the latter part of the week.
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:
One afternoon a long time Senator was riding in his limousine when he saw two men along the roadside eating grass. Disturbed, he ordered his driver to stop and he got out to investigate.
One afternoon a long time Senator was riding in his limousine when he saw two men along the roadside eating grass. Disturbed, he ordered his driver to stop and he got out to investigate.
He asked one man, "Why are you eating grass?"
"We don't have any money for food," the poor man replied. "We have to eat grass."
"Well, then, you can come with me to my house and I'll feed you," the Senator said.
"But sir, I have a wife and two children with me. They are over there, under that tree."
"Bring them along," the Senator replied.
Turning to the other poor man he stated, "You come with us, also."
The second man, in a pitiful voice, then said, "But sir, I also have a wife and SIX children with me!"
"Bring them all, as well," the Senator answered.
They all entered the car, which was no easy task, even for a car as large as the limousine was. Once underway, one of the poor fellows turned to the Senator and said, "Sir, you are too kind. Thank you for taking all of us with you."
The Senator replied, "Glad to do it. You'll really love my place. The grass is almost a foot high."
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.
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, March 5, 2010
3/5/10
Both the stock and bond markets improved on Thursday, which was nice to see. Both the initial and continuing jobless claims posted week-over-week drops, causing traders to ratchet their estimates for today’s jobs data downward, and pending home sales dropped. Greece began selling 5 billion Euros of 10-yr debt after promising to reduce Europe's largest budget deficit, which included wage cuts that has prompted more protests. Right now, the futures market is pricing in an 86% chance that the Fed keeps rates somewhere between 0% and .25% through June 23rd, 2010. But a rumor swept the markets yesterday that a very large buyer in 4.5% securities moved mortgages relative to Treasury rates. Supply from lenders (read: locks) has increased lately as rates have crept back down.
This morning’s news, however, has really moved interest rates initially. Non-Farm Payroll “only” dropped by 36,000, and the unemployment rate held steady at 9.7%. Hourly Earnings were up, and the average workweek was down slightly. Rates shot up on the news, as did the stock markets. Call it a knee-jerk reaction, and sometimes you wonder if the market conveniently forgets that the unemployment rate is still near 10%, but stock market futures did indeed rally on the news, and mortgage prices worsened by upwards of .250 in price.
This morning’s news, however, has really moved interest rates initially. Non-Farm Payroll “only” dropped by 36,000, and the unemployment rate held steady at 9.7%. Hourly Earnings were up, and the average workweek was down slightly. Rates shot up on the news, as did the stock markets. Call it a knee-jerk reaction, and sometimes you wonder if the market conveniently forgets that the unemployment rate is still near 10%, but stock market futures did indeed rally on the news, and mortgage prices worsened by upwards of .250 in price.
3/4/10
Mortgage prices got off to a softer start Wednesday as the Non-Manufacturing ISM number showed an unexpected increase. The 8:15AM EST ADP employment number suddenly had analysts lowering their forecasts for tomorrows Non-Farm Payroll number, and the estimates now seem to be -60,000 jobs with an unemployment rate of 9.8%. The Fed’s Beige Book (which is a report of the various Fed districts) showed some improvement but with soft labor markets and a weak commercial real estate sector.
Today we have Jobless Claims, some productivity numbers, and Factory Orders, along with the Treasury announcing the amounts of next week’s 3, 10, and 30-year auctions. And tomorrow we could see some volatility with the unemployment data. Greece is still in the spotlight as investors are still wary, but most agree that a bailout is likely with Greece issuing a 10-yr note and a meeting scheduled for tomorrow between the Greek Prime Minister and the German Chancellor. Currently mortgage prices are roughly unchanged.
Today we have Jobless Claims, some productivity numbers, and Factory Orders, along with the Treasury announcing the amounts of next week’s 3, 10, and 30-year auctions. And tomorrow we could see some volatility with the unemployment data. Greece is still in the spotlight as investors are still wary, but most agree that a bailout is likely with Greece issuing a 10-yr note and a meeting scheduled for tomorrow between the Greek Prime Minister and the German Chancellor. Currently mortgage prices are roughly unchanged.
3/3/10
Greece announced a well-publicized $5.4 billion plan to cut its deficit (3rd one in 3 months), which of course has their workers protesting. Taking a longer term view, these measures should help the country. Depending on the news from Greece, money either flows in to or out of our Treasury market with 10-yr Notes in Greece yield about 6 %. ADP showed February private sector jobs declining 20,000, with a back-month revision. Later this morning we’ll see some ISM numbers, and the Beige Book, but overnight (and for now) the rate markets are pretty quiet
3/2/10
Yesterday we learned that in January Personal Income increased .1% but that Personal Spending Increased by .5%. So much for that savings rate, which hits its lowest level since 2008. In addition, the ISM Manufacturing Index for February fell slightly from January’s levels, and Construction Spending dropped as expected. The decline in construction spending was led by a fall in private nonresidential construction spending, which more than offset a moderate increase in residential construction.
With a slight break in the scheduled news today, the rate markets are pretty quiet and close to unchanged from yesterday, although the stock markets appear poised to continue rallying.
With a slight break in the scheduled news today, the rate markets are pretty quiet and close to unchanged from yesterday, although the stock markets appear poised to continue rallying.
Monday, March 1, 2010
Mortgage Market Review - 3/1/10
This Morning…Monday, March 1, 2010:
Treasuries and mortgages started unchanged early this morning. At 8:30 Jan personal income and spending income ame in a bit lower than expected. There was no market reaction to the data in either equity markets or the bond market. At 9:30 the DJIA opened +46, the 10 yr at 9:30 unchanged and mortgage prices are flat.
Last Week:
Mortgage bond prices rebounded a bit last week pushing mortgage interest rates slightly lower. The majority of the data came in bond friendly. Weaker than expected consumer confidence data Tuesday helped mortgage interest rates improve. The Treasury auctions showed decent foreign demand. The gross domestic product price deflator component showed a smaller price increase than expected while the consumer spending component also came in weaker than expected. Existing home sales fell a surprising 7.1%, considerably weaker than the expected 1% increase. The week wasn't a good one for the economic bulls, and particularly those that think the housing markets are making a turn.
This Week:
This week is full of news, beginning with Personal Income & Consumption and Construction Spending today, along with the Institute of Supply Managers Index. Tomorrow we have a break, and then on Wednesday we have the ADP employment number (which doesn’t include government jobs), the ISM services number, and the Beige Book from the Fed. Thursday is Jobless Claims, 4th quarter Productivity, Factory Orders, and Pending Home Sales. Lastly, Friday we have the usual set of employment data, which is the biggest economic event of the week. Look for a decrease of about 20,000 jobs in February and for the unemployment rate to increase to 9.8% from 9.7%. There are also many that believe the decline in jobs will be more than that, and the unemployment rate will be closing back toward 10%. It will unquestionably be a volatile week for interest rates.
EconomicIndicator
Personal Income and Outlays
Monday, March 1,8:30 am, et
Income up 0.4%,Outlays up 0.4%
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
PCE Price Index
Monday, March 1,8:30 am, et
Up 0.1%
Important. An indication of inflationary pressures. Decreases may lead to lower rates.
Construction Spending
Monday, March 1,10:00 am, et
Down 0.6%
Low importance. An indication of economic strength. A significant decrease may lead to lower rates.
ISM Index
Monday, March 1,10:00 am, et
58.0
Important. A measure of manufacturer sentiment. A large decline may lead to lower mortgage rates.
ADP Employment
Wednesday, March 3,8:30 am, et
-15k
Important. An indication of employment. Weakness may bring lower rates.
Fed "Beige Book"
Wednesday, March 3,2:00 pm, et
None
Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates.
Revised Q4 Productivity
Thursday, March 4,8:30 am, et
Up 6.2%
Important. A measure of output per hour. Improvement may lead to lower mortgage rates.
Factory Orders
Thursday, March 4,10:00 am, et
Up 1.2%
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Employment
Friday, March 5,8:30 am, et
Unemp. @ 9.8%,Payrolls -25k
Very important. An increase in unemployment or a large decrease in payrolls may bring lower rates.
Consumer Credit
Friday, March 5,3:00 pm, et
Down $4.1 billion
Low importance. A significantly large increase may lead to lower mortgage interest rates.
Market Forecast:
Overall, look for a fairly active week for mortgage rates. The abundance of fundamental data this week provides a good opportunity for mortgages to improve. If the data shows weakness in the economy with little or no inflationary pressures then it is possible for mortgage bonds to rally resulting in mortgage interest rate decreases. However, if the data shows that the economy is rebounding or any significant signs of inflation, mortgage bonds may fall pushing mortgage interest rates higher.
This week brings us the release of six economic reports to be concerned with. Friday is undoubtedly the biggest day of the week and it is fairly safe to label Tuesday the least important with no relevant data scheduled for release. We may see movement in rates several days this week but Look for the week to become increasingly volatile at mid-week as players make adjustments for employment data.
Some Humor:
Two Irishmen, Patrick & Michael, were adrift in a lifeboat following a dramatic escape from a burning freighter.
While rummaging through the boat's provisions, Patrick stumbled across an old lamp. Secretly hoping that a genie would appear, he rubbed the lamp vigorously. To the amazement of Patrick, a genie came forth. This particular genie, however, stated that he could only deliver one wish, not the standard three. Without giving much thought to the matter, Patrick blurted out, "Make the entire ocean into Guinness Beer!"
The genie clapped his hands with a deafening crash, and immediately the entire sea turned into the finest brew ever sampled by mortals. Simultaneously, the genie vanished. Only the gentle lapping of Guinness on the hull broke the stillness as the two men considered their circumstances.
Michael looked disgustedly at Patrick whose wish had been granted. After a long, tension-filled moment, he spoke: "Nice going Patrick! Now we're going to have to pee in the boat!
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.errors.
Treasuries and mortgages started unchanged early this morning. At 8:30 Jan personal income and spending income ame in a bit lower than expected. There was no market reaction to the data in either equity markets or the bond market. At 9:30 the DJIA opened +46, the 10 yr at 9:30 unchanged and mortgage prices are flat.
Last Week:
Mortgage bond prices rebounded a bit last week pushing mortgage interest rates slightly lower. The majority of the data came in bond friendly. Weaker than expected consumer confidence data Tuesday helped mortgage interest rates improve. The Treasury auctions showed decent foreign demand. The gross domestic product price deflator component showed a smaller price increase than expected while the consumer spending component also came in weaker than expected. Existing home sales fell a surprising 7.1%, considerably weaker than the expected 1% increase. The week wasn't a good one for the economic bulls, and particularly those that think the housing markets are making a turn.
This Week:
This week is full of news, beginning with Personal Income & Consumption and Construction Spending today, along with the Institute of Supply Managers Index. Tomorrow we have a break, and then on Wednesday we have the ADP employment number (which doesn’t include government jobs), the ISM services number, and the Beige Book from the Fed. Thursday is Jobless Claims, 4th quarter Productivity, Factory Orders, and Pending Home Sales. Lastly, Friday we have the usual set of employment data, which is the biggest economic event of the week. Look for a decrease of about 20,000 jobs in February and for the unemployment rate to increase to 9.8% from 9.7%. There are also many that believe the decline in jobs will be more than that, and the unemployment rate will be closing back toward 10%. It will unquestionably be a volatile week for interest rates.
EconomicIndicator
Personal Income and Outlays
Monday, March 1,8:30 am, et
Income up 0.4%,Outlays up 0.4%
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
PCE Price Index
Monday, March 1,8:30 am, et
Up 0.1%
Important. An indication of inflationary pressures. Decreases may lead to lower rates.
Construction Spending
Monday, March 1,10:00 am, et
Down 0.6%
Low importance. An indication of economic strength. A significant decrease may lead to lower rates.
ISM Index
Monday, March 1,10:00 am, et
58.0
Important. A measure of manufacturer sentiment. A large decline may lead to lower mortgage rates.
ADP Employment
Wednesday, March 3,8:30 am, et
-15k
Important. An indication of employment. Weakness may bring lower rates.
Fed "Beige Book"
Wednesday, March 3,2:00 pm, et
None
Important. This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates.
Revised Q4 Productivity
Thursday, March 4,8:30 am, et
Up 6.2%
Important. A measure of output per hour. Improvement may lead to lower mortgage rates.
Factory Orders
Thursday, March 4,10:00 am, et
Up 1.2%
Important. A measure of manufacturing sector strength. Weakness may lead to lower rates.
Employment
Friday, March 5,8:30 am, et
Unemp. @ 9.8%,Payrolls -25k
Very important. An increase in unemployment or a large decrease in payrolls may bring lower rates.
Consumer Credit
Friday, March 5,3:00 pm, et
Down $4.1 billion
Low importance. A significantly large increase may lead to lower mortgage interest rates.
Market Forecast:
Overall, look for a fairly active week for mortgage rates. The abundance of fundamental data this week provides a good opportunity for mortgages to improve. If the data shows weakness in the economy with little or no inflationary pressures then it is possible for mortgage bonds to rally resulting in mortgage interest rate decreases. However, if the data shows that the economy is rebounding or any significant signs of inflation, mortgage bonds may fall pushing mortgage interest rates higher.
This week brings us the release of six economic reports to be concerned with. Friday is undoubtedly the biggest day of the week and it is fairly safe to label Tuesday the least important with no relevant data scheduled for release. We may see movement in rates several days this week but Look for the week to become increasingly volatile at mid-week as players make adjustments for employment data.
Some Humor:
Two Irishmen, Patrick & Michael, were adrift in a lifeboat following a dramatic escape from a burning freighter.
While rummaging through the boat's provisions, Patrick stumbled across an old lamp. Secretly hoping that a genie would appear, he rubbed the lamp vigorously. To the amazement of Patrick, a genie came forth. This particular genie, however, stated that he could only deliver one wish, not the standard three. Without giving much thought to the matter, Patrick blurted out, "Make the entire ocean into Guinness Beer!"
The genie clapped his hands with a deafening crash, and immediately the entire sea turned into the finest brew ever sampled by mortals. Simultaneously, the genie vanished. Only the gentle lapping of Guinness on the hull broke the stillness as the two men considered their circumstances.
Michael looked disgustedly at Patrick whose wish had been granted. After a long, tension-filled moment, he spoke: "Nice going Patrick! Now we're going to have to pee in the boat!
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.errors.
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