Market UpDate W/ Bond Market UP!

Friday’s bond market has opened in positive territory as investors look to close the year out on a positive note. The stock markets are showing minor losses of 18 points in the Dow and 11 points in the Nasdaq. The bond market is currently up 10/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point.

There is nothing of importance this morning, making it highly likely that we will crawl into the end of the year. As expected, trading is extremely light this morning and there is no reason to think that will change before today’s 2:00 PM ET close. The stock markets are technically open all day, but it doesn’t look many traders went to work. We will probably see a little fluctuation in the major indexes and bond prices, but I would be highly surprised if we saw significant movement or an intra-day change to mortgage rates.
Next week brings us the release of several relevant economic reports. The week opens and closes with important reports, giving us a good look at current economic conditions. Monday has December’s Institute for Supply Management’s (ISM) manufacturing index. This is usually the first most current report we see month. It is posted the first business day of the month and covers the preceding month. The data tracks manufacturer sentiment, giving us an indication of manufacturing sector strength. It is considered to be one of the more important reports we see each month.

Market UpDate W/Labor Department Claims below forecasts

Thursday’s bond market has opened in negative territory following the release of much stronger than expected economic data. The stock markets have had little reaction to the news with the Dow up 9 points and the Nasdaq down 2 points. The bond market is currently down 9/32, but we will still see a noticeable improvement in this morning’s mortgage rates due to strength late yesterday. If comparing to yesterday’s morning rates, we should see an improvement of approximately .375 of a discount point.
The Labor Department said early this morning that 388,000 new claims for unemployment benefits were filed last week. This was well below forecasts of 416,000 and the lowest total since July 2008. At first appearance, the headline number could be concerning for the bond market and good news for stocks. The size of the drop and the number of new claims hints at a strengthening employment sector. In fact, the number of weekly new claims has risen only once in the past 6 weeks.
That said, the markets have not had a significant reaction to the data for a couple of reasons. First and primarily, the data covers only a single week’s worth of new claims. Another portion of the report showed that the number of continuing claims for benefits (claims that are not new) rose during the week when analysts were expecting them to remain flat. Also, the reason for the drop in new claims could be the Christmas Holiday last week where state offices were closed at least one of the five days. So, while the headline number of 388,000 does draw attention, it comes from a report that does not carry significant importance because of the short term it covers and were statistics from a holiday-shortened week.

Market UpDate

Tuesday’s bond market has opened in negative territory despite quite favorable economic news and an uneventful open in stocks. The Dow and Nasdaq are both currently down a couple of points. The bond market is currently down 13/32, which will likely push this morning’s mortgage rates higher by approximately .125 - .250 of a discount point.
December’s Consumer Confidence Index (CCI) was this morning’s only relevant economic data. The Conference Board said late this morning that their CCI reading stood at 52.5 this month. This was nearly a 2-point drop from November’s revised reading, indicating that consumers were less optimistic about their own financial situations than many had thought. Making the news even more interesting is the fact that analysts had forecasted an increase of 2 points from November. This means that while the markets were expecting a rise in confidence, it was actually falling. That is good news for the bond market because waning consumer confidence means consumers are less likely to make large purchases in the near future, limiting fuel for economic growth.
Despite this favorable data, the bond market is showing moderate losses. This could be partly due to trader maneuvering ahead of the Treasury auctions that will be held today and tomorrow. 5-year Notes will be sold today and 7-year Notes tomorrow. Tomorrow’s sale is a closer term to mortgage bonds than today’s is, but the first of the two often gives us the best measurement of investor demand. The pre-sale weakness is fairly common as participants hedge their positions before bidding starts, but as long as the sales don’t go poorly those early losses are often erased during afternoon trading.

Redenbaugh Xmas 2010

A digital greeting card by Smilebox

Tangy Pineapple Chicken Recipe

This recipe is easy, fast and delicious

Prep time: 30 minutes

Cook in Slow cooker on low for 5 to 6 hours.

2 pounds of chicken thigh meat, boneless, skinless and cut into 1 to 2 inch wide strips

20 –ounce can of pineapple (tidbits) or about ½ of a whole fresh pineapple cut into tidbits.

20-ounce can of pineapple rings or use the other ½ of your fresh pineapple cut into rings
2 tbsp of butter
¼ cup of brown sugar
1 large sweet Red Pepper chopped, about 1 cup
BBQ Sauce …use your favorite about 1 cup
½ cup of Italian salad dressing …use your favorite
2 teaspoons of dried oregano crushed

In a large skillet cook chicken in hot oil over medium heat until brown. Drain off fat and pour into your slow cooker. Add pineapple tidbits and sweet red pepper.

In a small bowl combine BBQ sauce, salad dressing and oregano stir all together and pour over chicken.
Cover and cook on low heat setting for 5 to 6 hours or high for 2 to 3 hours.

Cook your favorite rice, jasmine rice is a favorite of mine for this dish.
Once your dish has cooked, heat up a large fry pan with 2 tbsp of butter and your ¼ cup of brown sugar mix up and dissolved them together once they are warm add your pineapple rings and fry them up on both side so they are caramelized, add one or two rings to each serving. This last step is optional of course but will really set this dish apart from any other tangy chicken recipes you’ve ever made and is delightfully sweet and tangy. Enjoy!

Market UpDate for Monday

Monday’s bond market has opened in positive territory as last week’s late strength extends into this morning’s trading. The stock markets are doing their part but showing losses rather than gains with the Dow down 38 points and the Nasdaq down 5 points. The bond market is currently up 14/32, which with Friday’s afternoon strength should improve this morning’s mortgage rates by approximately .625 - .750 of a discount point.
There is no relevant economic news scheduled for release today or tomorrow. This means we can look towards the stock markets for direction in bond trading and mortgage rates. If the major stock indexes move higher, we could see pressure in bonds and mortgage rates. Ideally, we would like to see stock weakness that helps boost bond prices and improve mortgage pricing.
This holiday-shortened trading week brings us the release of six monthly or quarterly economic reports, all being posted Wednesday and Thursday. Only a couple of the reports being released are considered to be of high importance to the markets. With the Christmas holiday being observed this week, we can expect very thin trading. This means that we may see a larger reaction than normal to some news because there will be fewer traders working and less transactions being made.

Market UpDate for the Holiday Week

This holiday-shortened trading week brings us the release of six monthly or quarterly economic reports. Only a couple of the reports being released are considered to be of high importance to the markets. With the Christmas holiday being observed during the week, we can expect very thin trading. This means that we may see a larger reaction than normal to some news because there will be fewer traders working and less transactions being made.
There is no relevant economic news scheduled for release tomorrow or Tuesday, so look for the stock markets to help drive bond trading and mortgage rates those days. Generally speaking, stock market strength should equate into bond weakness and higher mortgage rates. However, the light trading could allow some movement in the major stock indexes without heavily influencing bond trading and mortgage pricing.
Two of the week’s reports are scheduled for posting Wednesday. The first is the final revision to the 3rd Quarter GDP. I don’t think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month’s first revision showed that the economy expanded at a 2.5% annual pace during the quarter and this month’s revision is expected to show a small upward revision. A revision higher than the 2.7% rate that is expected would be considered bad news for bonds. But since this data is quite aged at this point I don’t think it will have much of an impact on mortgage rates Wednesday.

Market UpDate

Friday’s bond market has opened in positive territory again with a mixed morning in stocks and no surprises in today’s only economic news. The Dow is currently down 28 points while the Nasdaq has gained 6 points. The bond market is currently up 7/32, but we should see a sizable improvement in this morning’s mortgage pricing due partly to strength in bonds late yesterday. If comparing to yesterday’s morning pricing, we should see an improvement of approximately .625 of a discount point in rates.
November’s Leading Economic Indicators (LEI) was today’s only relevant economic data. The Conference Board announced an increase of 1.1% in November’s reading, meaning they are predicting fairly rapid economic growth over the next three to six months. This is basically bad news for the bond market and mortgage rates, but since it nearly matched forecasts it has had a minimal impact on today’s pricing.
Yesterday’s late strength that carried into this morning’s trading allows us to be optimistic that the worst is behind us in regards to the bond sell-off and resulting spike in mortgage rates. If looking at the markets using the same approach that has worked so well for us for many years, we could see further improvements to rates in the immediate future. However, that same approach didn’t do us much good the first part of the month as bond yields and mortgage rates shot upward. So, we remain cautiously optimistic. It would be a good idea to not let our guard down quite yet, but if the current situation as we see it remains intact, there is more likelihood of seeing rates improve from current levels than there is of them moving much higher. Let’s cross our fingers that we don’t get blindsided again.

Market UpDate and FOMC meeting w/ NO Change to short term Interest Rates

Today’s FOMC meeting has adjourned with no change to key short-term interest rates, as expected. The post meeting statement seemed to be favorable for bonds with points such as the economy not growing fast enough to improve unemployment, business spending has slowed compared to earlier this year and employers unwilling to add payrolls. These all suggest that the economy is growing much slower than the Fed would like, and accordingly they are continuing with their $600 billion Treasury security purchase campaign.

So, bad news about the economy from the Fed is good news for the bond market, correct? Not today. The stock markets have had little reaction to the release and remain near this morning’s levels. However, in keeping pace with the illogic trading patterns of late, the bond market went into selling mode again. The benchmark 10-year Treasury Note’s yield is now 3.39%, leaving the rec ent resistance levels in the dust. This means that the previous ceilings are now levels of support on the yield, which translates into higher mortgage rates. We will certainly see upward revisions to mortgage rates this afternoon. They will likely be around .250 - .375 of a discount point from this morning’s pricing, possibly more if bonds continue to sell into closing.

Monday Market UpDate

Monday’s bond market has opened in positive territory following a flat open in stocks and a primetime TV reminder from Fed Chairman Bernanke that the economic outlook isn’t so rosy. The stock markets are nearly unchanged from Friday’s close with the Dow down 3 points and the Nasdaq down 1 point, but just the lack of a gain is good news for the bond market at this point. The bond market is currently up 15/32, which should improve this morning’s mortgage rates by approximately .125 - .250 of a discount over Friday’s morning pricing.

There is no relevant economic news being posted today. Fed Chairman Bernanke’s interview on last night’s edition of 60 Minutes has helped push bonds more towards reality. During his interview that aired last night, he said that unemployment would likely remain high for 4 or 5 years and that recent concerns about inflation are overstated. He also added that another round of debt purchases by the Fed is possible. I find the timing of this interview to be impeccable and quite ironic after last week’s activity. It, along with Friday’s employment data, will hopefully help restore some reason to the markets and remind us that the economy still has plenty to overcome.

Quote For The Day

"May the sun always shine on your windowpane; May a rainbow be certain to follow each rain; May the hand of a friend always be near you; May God fill your heart with gladness to cheer you."


Irish Blessing

Friday Market UpDate

Friday’s bond market has opened in positive territory following the release of weaker than expected employment numbers. The stock markets are showing losses after the release, but by a far less margin than we would expect. The Dow is currently down 23 points while the Nasdaq is showing a loss of 3 points. The bond market is currently up 8/32, which should improve this morning’s mortgage rates by approximately .375 of a discount point from yesterday’s morning pricing.
The Labor Department said that the U.S. unemployment rate rose 0.2% last month to 9.8% when analysts were expecting no change from October’s rate. They also reported that 39,000 new jobs were added to the economy last month, falling well short of the 130,000 that were expected. And to complete the trifecta, average earnings remained unchanged compared to the 0.1% increase that was forecasted.

This is great news for the bond market and mortgage rates. At leas t it is supposed to be. As I addressed yesterday, these weak numbers did not come as a surprise. What is surprising is the relatively calm reaction to them. I would have expected a reversal of Wednesday’s selling, especially since this morning’s data carries much more weight than any of the nuggets of info that market bulls based the stock rally on. At the very least, today’s data underscores the fact that Wednesday’s economic optimism was certainly premature. I suspect we may see some weakness in stocks into closing as investors look to lock profits. If this is the case, we could bond prices rise this afternoon, possibly improving mortgage rates further.