Monday, October 25, 2010

Monday Market UpDate

Monday's bond market has opened in positive territory despite stronger than expected housing data and early stock strength. The stock markets are reacting favorably to the data, pushing the Dow up 70 points and the Nasdaq up 15 points. The bond market is currently up 10/32, which should improve this morning's mortgage rates by approximately .125 of a discount point

The National Association of Realtors said late this morning that sales of existing homes rose approximately 10% last month. This was much stronger than many had expected, indicating that the housing sector was not as bad as thought. That is basically bad news for the bond market but bond traders don't appear to be too concerned with it.

The rest of the week brings us the release of six more economic reports and two relevant Treasury auctions for the bond market to digest. October's Consumer Confidence Index (CCI) is tomorrow's only news. This Conference Board index will be released at 10:00 AM ET. It gives us a measurement of consumer willingness to spend and is expected to show a small increase in confidence from last month's 48.5 reading. That would mean that consumers felt a little better about their own financial situations than last month, indicating they are more likely to make large purchases in the near future. As long as the reading doesn't exceed the forecasted 49.0, we will likely see the bond market react favorably to this report. This data is watched closely because consumer spending makes up two-thirds of the U.S. economy.

Overall, we likely have an active few days ahead of us. I believe that the single most important day will probably end up being Friday with the extremely important GDP release in the morning and three reports on the day. It is difficult to label any day as the least important with all having something scheduled that has the potential to change rates. Accordingly, I strongly recommend maintaining contact with your mortgage professional this week, especially if still floating an interest rate.

Friday, October 22, 2010

Friday's Market UpDate

Friday's bond market has opened fairly flat following a mixed open in the stock markets. The Dow is showing a 17-point loss while the Nasdaq has gained 13 points. The bond market is nearly unchanged from yesterday's close, meaning we should see little change in this morning's mortgage rates.

There is no relevant economic data scheduled for release today, so we should be looking towards the stock markets for guidance on bond trading. If the major stock indexes move upward from current levels, we may see some pressure in bonds that could lead to a small increase to mortgage pricing this afternoon. If stocks head lower during afternoon trading, we could see an improvement to mortgage rates later today.

Next week brings us the release of a handful of economic reports that have the potential to affect mortgage rates, including the extremely important initial reading of the 3rd Quarter Gross Domestic Product. There ar e also two Treasury auctions that may influence bond market sentiment and lead to changes to mortgage rates in the middle of the week.

Friday, October 15, 2010

Friday's Market UpDate

Friday's bond market has opened in negative territory as yesterday afternoon's selling extends into this morning's trading. The stock markets are mixed with the Dow down 25 points and the Nasdaq up 17 points. The bond market is currently down 6/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point.
Today's economic data came in favorable for the most part, but one the more important reports we see each month showed stronger than expected results. The bad news came in the Commerce Department's Retail Sales report for September that measures consumer spending. It showed a 0.6% increase in retail levels sales, exceeding analysts' forecast of a 0.4% rise. Today's release also revised sales from up 0.4% to up 0.7%, indicating that consumers spent more in August and September than many had thought. This is bad news for the bond market and mortgage rates because consumer spending makes up two-thirds of t he U.S. economy. Consumers spending more money each month fuels economic growth that makes long-term securities such as mortgage bonds less attractive to investors.

Tuesday, October 12, 2010

Market UpDate

Tuesday's bond market has opened in positive territory following early weakness in stocks. The stock markets are starting this holiday-shortened week in negative ground with the Dow down 50 points and the Nasdaq down 8 points. The bond market is currently up 6/32, which should improve this morning's mortgage rates by approximately .125 of a discount point from Friday's morning pricing.
There was no relevant economic data posted this morning, but we do have something of interest being released this afternoon. The Fed will release the minutes from their last FOMC meeting at 2:00 PM ET today. These have the potential to be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed's next move. If Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates higher tomorrow afternoon. However, if they repeat recent comments and stateme nts that inflation is not of much concern and that there is still considerable concern about the economy, we should see little reaction in mortgage rates or a small improvement. Also worth watching is any discussion about the Fed getting more involved with purchasing government or mortgage debt. Any indication of them making more purchases should be taken as very good news for mortgage rates and will likely lead to lower rates this afternoon.

Quote For The Day

"To put the world right in order, we must first put the nation in order; to put the nation in order, we must first put the family in order; to put the family in order, we must first cultivate our personal life; we must first set our hearts right."


Monday, October 11, 2010

Monday Morning Market UpDate

The lack of job creation was highlighted again last week with the monthly employment numbers from the Labor Department. While 64,000 new jobs were created by private firms, the growth was not enough to offset the job losses in government jobs at both the Federal and state levels. Last month,
the economy lost 95,000 jobs, and mortgage rates slipped slightly downward in response. While
much of the economic news for the week was not all that positive, the ISM Services Index did manage
to come in with an increase, when no significant change was expected.

This week, we’ll get another glimpse into inflation, or the lack thereof, and retail sales. With GDP
running below 2%, inflationary pressures are likely to remain very muted. Both the Producer and
Consumer Price Indices are released this week. Readings at expectations will help hold rates low.
Retail sales data is also due this week, with an increase of 0.4% expected. If we see sales pull back
rather than grow, we could see mortgage rates moving downward some as the week ends.

Sunday, October 10, 2010

Wonderful Gift of Aloha

My birthday this year will go down as one of my best. My sister’s are here visiting and treated me all day to a great lunch at Haleiwa’s Joes and shopping then we went to a Luau at Paradise Cove, because you haven’t been to Hawaii unless to see and enjoy the local food, dance and culture of a luau.  I especially enjoy the Hula dancers and Samoan fire dancer, oh yeah!  Thank you sis’ters for a wonderful and very special day and a big Mahalo to all of you on FB who wrote on my wall and wished me a Happy Birthday.

Friday, October 8, 2010

Friday's Market UpDate

Friday's bond market has opened in positive territory after this morning's employment data gave us favorable results. The stock markets have actually had little reaction to the news with the Dow and Nasdaq mixed from yesterday's close. The Dow is currently up 10 points while the Nasdaq has slipped 4 points. The bond market is currently up 9/32, which should improve this morning's mortgage rates by approximately .125 of a discount point.

The Labor Department gave us September's Employment report this morning. It showed that the unemployment rate remained at 9.6% last month and that 94,000 jobs were lost during the month. The unemployment rate was slightly below forecasts but the payroll number was much weaker than analysts had expected. They were calling for no change in the number of payrolls from August's level, meaning the employment sector was weaker than expected. This is very good news for the bond market and mortgage rates.

The third reading that is watched also gave us favorable results. It showed that average hourly earnings were unchanged from August when it was expected to rise 0.1%. Rising earnings give consumers more money to spend, fueling economic activity. Therefore, the weaker than expected reading is also good news for bonds and mortgage pricing.

Next week brings us an abundance of economic data along with two relevant Treasury auctions and the minutes from the past FOMC meeting. There is nothing of importance scheduled for Monday, but the rest of the week is packed with data and related events. Look for more details on next week's calendar in Sunday's weekly preview.

Wednesday, October 6, 2010

Market UpDate

Wednesday's bond market has opened in positive territory with the stock markets mixed and no important economic data scheduled for release today. The stock markets have failed to extend yesterday's rally, leaving the Dow up 12 points and the Nasdaq down 11 points. The bond market is currently up 9/32, which should improve this morning's mortgage rates by approximately .125 - .250 of a discount point.
With no relevant data being posted today, look for the stock markets to influence bond trading and mortgage rates the rest of the day. I suspect we will see a relatively calm afternoon in the bond market and little chance of a change to mortgage pricing.

Tomorrow's only data is last week's unemployment numbers. The Labor Department will post them early tomorrow morning. Since this weekly report tracks only a single week's worth of new claims, its impact on the markets and mortgage rates is usually minimal. There is a possibility of seeing mortgage r ates react to the news since it is the day's only release and the major monthly report will be posted Friday. Analysts are expecting tomorrow's release to show that 455,000 new claims for unemployment benefits were filed last week. The larger the number, the better the news for the bond market and mortgage rates.

Quote For The Day

The angel of the Family is Woman. Mother, wife, or sister, Woman is the caress of life, the soothing sweetness of affection shed over its toils, a reflection for the individual of the loving providence which watches over Humanity. In her there is treasure enough of consoling tenderness to allay every pain. Moreover for every one of us she is the initiator of the future. The mother's first kiss teaches the child love; the first holy kiss of the woman he loves teaches man hope and faith in life; and love and faith create a desire for perfection and the power of reaching towards it step by step; create the future, in short, of which the living symbol is the child, link between us and the generations to come. Through her the Family, with its divine mystery of reproduction, points to Eternity.

Giuseppe Mazzini

Tuesday, October 5, 2010

Market UpDate

Tuesday's bond market has opened relatively flat despite strong stock gains. The stock markets are showing gains after overseas markets rallied last night, pushing the Dow higher by 127 points and the Nasdaq higher by 40 points. The bond market is currently up 2/32, which will likely keep this morning's mortgage rates near yesterday's levels.

There was no important economic data posted this morning. The only data that was posted was irrelevant to the mortgage market and has not impacted mortgage rates. The same goes for tomorrow, leaving the stock markets to influence bond trading and mortgage rates. Bonds have held up well this morning considered the rally in stocks, but if the major indexes move higher we may see upward revisions to mortgage rates this afternoon.

Quote For The Day

We are all visitors to this time, this place. We are just passing through. Our purpose here is to observe, to learn, to grow, to love... and then we return home.

Australian Aboriginal Proverb

Sunday, October 3, 2010

Cell Phone Etiquette

While sitting having my morning tea at Starbucks I am force to listen to a conversation another moron is having with a family member about his mother’s illness all this loud talking is over the music piped in for our enjoyment, right like I could even hear it.. . Has everyone lost their since of politeness or are we all wrapped up in our own self involvement. First of all why would anyone want to talk about mom’s illness and personal medication and doctors in front of 25 people in Starbucks? But loud talking people on cell phone is quite disturbing anywhere. Oh and what’s up with the person on a plane who has to immediately turn on their phone and call someone before you even get out of the plane, allow everyone on the plane to hear their conversation.. I know I don’t want to hear it. What is so dam important it can’t wait until you can talk in private so you don’t disturb everyone but it’s so abundantly clear no one cares about the person sitting next to them or for that matter people nearby…. I don’t know what the answer is but we are really becoming a society of impolite detached people. So put your phones away talk to the person next to you instead and smile every once in a while.

Friday, October 1, 2010

Friday Market UpDate

Friday's bond market opened in negative territory after some of this morning's economic data revealed stronger than expected activity. The stock markets are also contributing to the bond weakness with gains of 64 points in the Dow and 15 points in the Nasdaq. The stock market is currently down 11/32, but we should still see a slight improvement in this morning's mortgage rates due to strength during trading late yesterday.

August's Personal Income and Outlays data was released early this morning. It showed that personal income rose 0.5% last month while spending rose 0.4%. Both of these readings were larger increases than what analysts had forecast, making them negative news for the bond market and mortgage rates. The data indicates that consumers had more money available to spend and spent more than what many market participants had thought. This fuels economic activity, making long-term securities such as mortgage bonds less attractive to investor