Mortgage Rate Update
http://ping.fm/7XYJY
Thursday, March 31, 2011
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Thursday, March 31, 2011
Treasuries and mortgages doing better early this morning. At 8:30 weekly jobless claims saw a decline of 6K filings from last week, however last week's claims were revised from 282K to 394K. Continuing claims were down 51K to 3.714 mil but as with the claims continuing claims were revised from 3.721 mil last week to 4.22 mil in the revision. The 4 wk average also increased to 394,250 frm 391.000 based on the revisions. The claims report today is data collected after the BLS gathered the data for tomorrow's monthly employment report.
Next up this morning, the March Chicago purchasing managers index, expected at 70.0 frm 71.2 in Feb, was 70.6. The new orders component at 74.5 frm 75.9, the employment index at 65.6 frm 59.8 the highest read since Dec 1983 and the prices pd for materials at 83.4 frm 81.2, the highest since July 2008. Employment and prices are more evidence that the economy is improving along with inflation concerns. However, there was little reaction to the report, treasuries and mortgages held steady with small price gains and the stock market unchanged.
Finally today, Feb factory orders were expected to be up 0.4%, were down 0.1% and Jan revised to +3.3% frm 3.1%.
In Europe inflation data was stronger than expected; in the 17-nation euro region inflation increased to 2.6% in March from 2.4% in February, European Union estimates showed today. That’s the fastest pace since October 2008, and exceeds the ECB’s 2.0% limit for a fourth month. Economists had forecast inflation to hold steady. Next week the ECB will meet to discuss increasing its base lending rate, the inflation data today further increases the chance ECB will increase rates. Following moves in China, Brazil, Russia and India base lending rates are moving higher. In the US so far, the Fed still holds that inflation is not an immediate problem and plans to continue the easing move of buying $600B of treasuries. Whether or not inflation is about to click in, the bond market will face a huge hill to climb keeping long term rates including mortgages at or below the present levels. Fed officials are increasingly more divided on ending QE 2 sooner and less buying than originally intended; Bernanke however appears to be holding with completing the entire $600B buying that will conclude at the end of June.
After all the data this morning the rate markets holding better than we would have thought given the strong Chicago PM index and inflation increase out of Europe. The stock market holding unchanged. Technically the 10 yr held 3.50% on Tuesday giving traders a little opportunity but overall the bond market still holds a bearish outlook for rates. The rest of the session will be setting up for tomorrow's employment report with estimates still for an increase of 200K jobs and the unemployment rate unchanged at 8.9%. If floating stay close today; normally we do not like having a market position into employment as it is too volatile.
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Thursday, March 31, 2011
Treasuries and mortgages doing better early this morning. At 8:30 weekly jobless claims saw a decline of 6K filings from last week, however last week's claims were revised from 282K to 394K. Continuing claims were down 51K to 3.714 mil but as with the claims continuing claims were revised from 3.721 mil last week to 4.22 mil in the revision. The 4 wk average also increased to 394,250 frm 391.000 based on the revisions. The claims report today is data collected after the BLS gathered the data for tomorrow's monthly employment report.
Next up this morning, the March Chicago purchasing managers index, expected at 70.0 frm 71.2 in Feb, was 70.6. The new orders component at 74.5 frm 75.9, the employment index at 65.6 frm 59.8 the highest read since Dec 1983 and the prices pd for materials at 83.4 frm 81.2, the highest since July 2008. Employment and prices are more evidence that the economy is improving along with inflation concerns. However, there was little reaction to the report, treasuries and mortgages held steady with small price gains and the stock market unchanged.
Finally today, Feb factory orders were expected to be up 0.4%, were down 0.1% and Jan revised to +3.3% frm 3.1%.
In Europe inflation data was stronger than expected; in the 17-nation euro region inflation increased to 2.6% in March from 2.4% in February, European Union estimates showed today. That’s the fastest pace since October 2008, and exceeds the ECB’s 2.0% limit for a fourth month. Economists had forecast inflation to hold steady. Next week the ECB will meet to discuss increasing its base lending rate, the inflation data today further increases the chance ECB will increase rates. Following moves in China, Brazil, Russia and India base lending rates are moving higher. In the US so far, the Fed still holds that inflation is not an immediate problem and plans to continue the easing move of buying $600B of treasuries. Whether or not inflation is about to click in, the bond market will face a huge hill to climb keeping long term rates including mortgages at or below the present levels. Fed officials are increasingly more divided on ending QE 2 sooner and less buying than originally intended; Bernanke however appears to be holding with completing the entire $600B buying that will conclude at the end of June.
After all the data this morning the rate markets holding better than we would have thought given the strong Chicago PM index and inflation increase out of Europe. The stock market holding unchanged. Technically the 10 yr held 3.50% on Tuesday giving traders a little opportunity but overall the bond market still holds a bearish outlook for rates. The rest of the session will be setting up for tomorrow's employment report with estimates still for an increase of 200K jobs and the unemployment rate unchanged at 8.9%. If floating stay close today; normally we do not like having a market position into employment as it is too volatile.
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Thursday, March 31, 2011
Treasuries and mortgages doing better early this morning. At 8:30 weekly jobless claims saw a decline of 6K filings from last week, however last week's claims were revised from 282K to 394K. Continuing claims were down 51K to 3.714 mil but as with the claims continuing claims were revised from 3.721 mil last week to 4.22 mil in the revision. The 4 wk average also increased to 394,250 frm 391.000 based on the revisions. The claims report today is data collected after the BLS gathered the data for tomorrow's monthly employment report.
Next up this morning, the March Chicago purchasing managers index, expected at 70.0 frm 71.2 in Feb, was 70.6. The new orders component at 74.5 frm 75.9, the employment index at 65.6 frm 59.8 the highest read since Dec 1983 and the prices pd for materials at 83.4 frm 81.2, the highest since July 2008. Employment and prices are more evidence that the economy is improving along with inflation concerns. However, there was little reaction to the report, treasuries and mortgages held steady with small price gains and the stock market unchanged.
Finally today, Feb factory orders were expected to be up 0.4%, were down 0.1% and Jan revised to +3.3% frm 3.1%.
In Europe inflation data was stronger than expected; in the 17-nation euro region inflation increased to 2.6% in March from 2.4% in February, European Union estimates showed today. That’s the fastest pace since October 2008, and exceeds the ECB’s 2.0% limit for a fourth month. Economists had forecast inflation to hold steady. Next week the ECB will meet to discuss increasing its base lending rate, the inflation data today further increases the chance ECB will increase rates. Following moves in China, Brazil, Russia and India base lending rates are moving higher. In the US so far, the Fed still holds that inflation is not an immediate problem and plans to continue the easing move of buying $600B of treasuries. Whether or not inflation is about to click in, the bond market will face a huge hill to climb keeping long term rates including mortgages at or below the present levels. Fed officials are increasingly more divided on ending QE 2 sooner and less buying than originally intended; Bernanke however appears to be holding with completing the entire $600B buying that will conclude at the end of June.
After all the data this morning the rate markets holding better than we would have thought given the strong Chicago PM index and inflation increase out of Europe. The stock market holding unchanged. Technically the 10 yr held 3.50% on Tuesday giving traders a little opportunity but overall the bond market still holds a bearish outlook for rates. The rest of the session will be setting up for tomorrow's employment report with estimates still for an increase of 200K jobs and the unemployment rate unchanged at 8.9%. If floating stay close today; normally we do not like having a market position into employment as it is too volatile.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Thursday, March 31, 2011
Treasuries and mortgages doing better early this morning. At 8:30 weekly jobless claims saw a decline of 6K filings from last week, however last week's claims were revised from 282K to 394K. Continuing claims were down 51K to 3.714 mil but as with the claims continuing claims were revised from 3.721 mil last week to 4.22 mil in the revision. The 4 wk average also increased to 394,250 frm 391.000 based on the revisions. The claims report today is data collected after the BLS gathered the data for tomorrow's monthly employment report.
Next up this morning, the March Chicago purchasing managers index, expected at 70.0 frm 71.2 in Feb, was 70.6. The new orders component at 74.5 frm 75.9, the employment index at 65.6 frm 59.8 the highest read since Dec 1983 and the prices pd for materials at 83.4 frm 81.2, the highest since July 2008. Employment and prices are more evidence that the economy is improving along with inflation concerns. However, there was little reaction to the report, treasuries and mortgages held steady with small price gains and the stock market unchanged.
Finally today, Feb factory orders were expected to be up 0.4%, were down 0.1% and Jan revised to +3.3% frm 3.1%.
In Europe inflation data was stronger than expected; in the 17-nation euro region inflation increased to 2.6% in March from 2.4% in February, European Union estimates showed today. That’s the fastest pace since October 2008, and exceeds the ECB’s 2.0% limit for a fourth month. Economists had forecast inflation to hold steady. Next week the ECB will meet to discuss increasing its base lending rate, the inflation data today further increases the chance ECB will increase rates. Following moves in China, Brazil, Russia and India base lending rates are moving higher. In the US so far, the Fed still holds that inflation is not an immediate problem and plans to continue the easing move of buying $600B of treasuries. Whether or not inflation is about to click in, the bond market will face a huge hill to climb keeping long term rates including mortgages at or below the present levels. Fed officials are increasingly more divided on ending QE 2 sooner and less buying than originally intended; Bernanke however appears to be holding with completing the entire $600B buying that will conclude at the end of June.
After all the data this morning the rate markets holding better than we would have thought given the strong Chicago PM index and inflation increase out of Europe. The stock market holding unchanged. Technically the 10 yr held 3.50% on Tuesday giving traders a little opportunity but overall the bond market still holds a bearish outlook for rates. The rest of the session will be setting up for tomorrow's employment report with estimates still for an increase of 200K jobs and the unemployment rate unchanged at 8.9%. If floating stay close today; normally we do not like having a market position into employment as it is too volatile.
Wednesday, March 30, 2011
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, March 30, 2011
Mortgage markets starting better this morning after price declines again yesterday; the 10 yr note at 9:00 was up slightly (2/32) while mtg prices were +4/32 (.12 bp). At 8:15 the March ADP non-farm private jobs report came in at +201K; small businesses +102K, medium businesses +82K and large businesses +17K. ADP reported the service sector jobs increased 164K the 15th consecutive increase in service producing sector; goods producing up 37K the 5th consecutive increase and manufacturing increased 37K the 6th consecutive increase. According to ADP the US private sector has averaged 175K jobs a month for the past six months. Projections of the 34 economists polled by Bloomberg ranged from gains of 171,000 to 295,000.
According to Chicago-based Challenger, Gray & Christmas Inc., another employment data point this morning, employers announced fewer job cuts in March than the same month last year, even as government payroll cutbacks climbed to the highest level in a year. Public employees accounted for almost half of all job cuts as states continue to cut fat with most state budgets in some kind of deficit.
Earlier this morning at 7:00 am the MBA released its weekly mortgage applications; they decreased 7.5% from one week earlier. The Refinance Index decreased 10.1% from the previous week. The seasonally adjusted Purchase Index decreased 1.7% from one week earlier. The unadjusted Purchase Index was 21.9% lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is up 2.0%. The four week moving average is up 2.1% for the seasonally adjusted Purchase Index, while this average is up 2.0% for the Refinance Index. The refinance share of mortgage activity decreased to 64.3% of total applications from 66.4% the previous week. This is the second lowest refinance share reported since May 2010. The adjustable-rate mortgage (ARM) share of activity decreased to 5.7% from 5.9% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.92% from 4.80%, with points decreasing to 0.83 from 0.96 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages increased to 4.16% from 4.02%, with points increasing to 0.99 from 0.90 (including the origination fee) for 80% loans.
Later today, at 1:00 pm Treasury will auction $29B of 7 yr notes. So far the 2 yr and 5 yr auctions were marginal at best. Today's auction closer to the long end of the curve will be closely watched by traders, another soft auction will likely add conviction that interest rates are on the way higher.
At 9:30 the DJIA opened +46, the 10 yr note traded +1/32, mortgage prices +4/32 (.12 bp) frm yesterday's close. Although the ADP report and the open in the equity markets would pressure to rate markets, interest rate markets have been in a slow free-fall for the past eight sessions and are now momentarily technically oversold. The potential for some improvement is high but in the wider perspective any rebound in rates will be seen as a selling opportunity by traders. The ECB about to increase rates along with many of the economies of the world, inflation concerns increasing albeit slowly, and as the calendar ticks off we get closer to the end of all of the Fed's easing moves with QE 2 ending in June. Markets will not wait to the end and will have to consider how markets will absorb the shortfall when the Fed stops buying treasuries.
Should be quiet the rest of the morning until the 7 yr note auction is completed at 1:00. Oversold momentum oscillators likely to keep traders still until another shoe drops (i.e., a poor 7 yr auction or stronger economic data when the official employment report for March hits Friday morning). Although some rebound can't be ignored, the rate markets will not likely loose their bearish outlook.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, March 30, 2011
Mortgage markets starting better this morning after price declines again yesterday; the 10 yr note at 9:00 was up slightly (2/32) while mtg prices were +4/32 (.12 bp). At 8:15 the March ADP non-farm private jobs report came in at +201K; small businesses +102K, medium businesses +82K and large businesses +17K. ADP reported the service sector jobs increased 164K the 15th consecutive increase in service producing sector; goods producing up 37K the 5th consecutive increase and manufacturing increased 37K the 6th consecutive increase. According to ADP the US private sector has averaged 175K jobs a month for the past six months. Projections of the 34 economists polled by Bloomberg ranged from gains of 171,000 to 295,000.
According to Chicago-based Challenger, Gray & Christmas Inc., another employment data point this morning, employers announced fewer job cuts in March than the same month last year, even as government payroll cutbacks climbed to the highest level in a year. Public employees accounted for almost half of all job cuts as states continue to cut fat with most state budgets in some kind of deficit.
Earlier this morning at 7:00 am the MBA released its weekly mortgage applications; they decreased 7.5% from one week earlier. The Refinance Index decreased 10.1% from the previous week. The seasonally adjusted Purchase Index decreased 1.7% from one week earlier. The unadjusted Purchase Index was 21.9% lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is up 2.0%. The four week moving average is up 2.1% for the seasonally adjusted Purchase Index, while this average is up 2.0% for the Refinance Index. The refinance share of mortgage activity decreased to 64.3% of total applications from 66.4% the previous week. This is the second lowest refinance share reported since May 2010. The adjustable-rate mortgage (ARM) share of activity decreased to 5.7% from 5.9% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.92% from 4.80%, with points decreasing to 0.83 from 0.96 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages increased to 4.16% from 4.02%, with points increasing to 0.99 from 0.90 (including the origination fee) for 80% loans.
Later today, at 1:00 pm Treasury will auction $29B of 7 yr notes. So far the 2 yr and 5 yr auctions were marginal at best. Today's auction closer to the long end of the curve will be closely watched by traders, another soft auction will likely add conviction that interest rates are on the way higher.
At 9:30 the DJIA opened +46, the 10 yr note traded +1/32, mortgage prices +4/32 (.12 bp) frm yesterday's close. Although the ADP report and the open in the equity markets would pressure to rate markets, interest rate markets have been in a slow free-fall for the past eight sessions and are now momentarily technically oversold. The potential for some improvement is high but in the wider perspective any rebound in rates will be seen as a selling opportunity by traders. The ECB about to increase rates along with many of the economies of the world, inflation concerns increasing albeit slowly, and as the calendar ticks off we get closer to the end of all of the Fed's easing moves with QE 2 ending in June. Markets will not wait to the end and will have to consider how markets will absorb the shortfall when the Fed stops buying treasuries.
Should be quiet the rest of the morning until the 7 yr note auction is completed at 1:00. Oversold momentum oscillators likely to keep traders still until another shoe drops (i.e., a poor 7 yr auction or stronger economic data when the official employment report for March hits Friday morning). Although some rebound can't be ignored, the rate markets will not likely loose their bearish outlook.
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, March 30, 2011
Mortgage markets starting better this morning after price declines again yesterday; the 10 yr note at 9:00 was up slightly (2/32) while mtg prices were +4/32 (.12 bp). At 8:15 the March ADP non-farm private jobs report came in at +201K; small businesses +102K, medium businesses +82K and large businesses +17K. ADP reported the service sector jobs increased 164K the 15th consecutive increase in service producing sector; goods producing up 37K the 5th consecutive increase and manufacturing increased 37K the 6th consecutive increase. According to ADP the US private sector has averaged 175K jobs a month for the past six months. Projections of the 34 economists polled by Bloomberg ranged from gains of 171,000 to 295,000.
According to Chicago-based Challenger, Gray & Christmas Inc., another employment data point this morning, employers announced fewer job cuts in March than the same month last year, even as government payroll cutbacks climbed to the highest level in a year. Public employees accounted for almost half of all job cuts as states continue to cut fat with most state budgets in some kind of deficit.
Earlier this morning at 7:00 am the MBA released its weekly mortgage applications; they decreased 7.5% from one week earlier. The Refinance Index decreased 10.1% from the previous week. The seasonally adjusted Purchase Index decreased 1.7% from one week earlier. The unadjusted Purchase Index was 21.9% lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is up 2.0%. The four week moving average is up 2.1% for the seasonally adjusted Purchase Index, while this average is up 2.0% for the Refinance Index. The refinance share of mortgage activity decreased to 64.3% of total applications from 66.4% the previous week. This is the second lowest refinance share reported since May 2010. The adjustable-rate mortgage (ARM) share of activity decreased to 5.7% from 5.9% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.92% from 4.80%, with points decreasing to 0.83 from 0.96 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages increased to 4.16% from 4.02%, with points increasing to 0.99 from 0.90 (including the origination fee) for 80% loans.
Later today, at 1:00 pm Treasury will auction $29B of 7 yr notes. So far the 2 yr and 5 yr auctions were marginal at best. Today's auction closer to the long end of the curve will be closely watched by traders, another soft auction will likely add conviction that interest rates are on the way higher.
At 9:30 the DJIA opened +46, the 10 yr note traded +1/32, mortgage prices +4/32 (.12 bp) frm yesterday's close. Although the ADP report and the open in the equity markets would pressure to rate markets, interest rate markets have been in a slow free-fall for the past eight sessions and are now momentarily technically oversold. The potential for some improvement is high but in the wider perspective any rebound in rates will be seen as a selling opportunity by traders. The ECB about to increase rates along with many of the economies of the world, inflation concerns increasing albeit slowly, and as the calendar ticks off we get closer to the end of all of the Fed's easing moves with QE 2 ending in June. Markets will not wait to the end and will have to consider how markets will absorb the shortfall when the Fed stops buying treasuries.
Should be quiet the rest of the morning until the 7 yr note auction is completed at 1:00. Oversold momentum oscillators likely to keep traders still until another shoe drops (i.e., a poor 7 yr auction or stronger economic data when the official employment report for March hits Friday morning). Although some rebound can't be ignored, the rate markets will not likely loose their bearish outlook.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, March 30, 2011
Mortgage markets starting better this morning after price declines again yesterday; the 10 yr note at 9:00 was up slightly (2/32) while mtg prices were +4/32 (.12 bp). At 8:15 the March ADP non-farm private jobs report came in at +201K; small businesses +102K, medium businesses +82K and large businesses +17K. ADP reported the service sector jobs increased 164K the 15th consecutive increase in service producing sector; goods producing up 37K the 5th consecutive increase and manufacturing increased 37K the 6th consecutive increase. According to ADP the US private sector has averaged 175K jobs a month for the past six months. Projections of the 34 economists polled by Bloomberg ranged from gains of 171,000 to 295,000.
According to Chicago-based Challenger, Gray & Christmas Inc., another employment data point this morning, employers announced fewer job cuts in March than the same month last year, even as government payroll cutbacks climbed to the highest level in a year. Public employees accounted for almost half of all job cuts as states continue to cut fat with most state budgets in some kind of deficit.
Earlier this morning at 7:00 am the MBA released its weekly mortgage applications; they decreased 7.5% from one week earlier. The Refinance Index decreased 10.1% from the previous week. The seasonally adjusted Purchase Index decreased 1.7% from one week earlier. The unadjusted Purchase Index was 21.9% lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is up 2.0%. The four week moving average is up 2.1% for the seasonally adjusted Purchase Index, while this average is up 2.0% for the Refinance Index. The refinance share of mortgage activity decreased to 64.3% of total applications from 66.4% the previous week. This is the second lowest refinance share reported since May 2010. The adjustable-rate mortgage (ARM) share of activity decreased to 5.7% from 5.9% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.92% from 4.80%, with points decreasing to 0.83 from 0.96 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages increased to 4.16% from 4.02%, with points increasing to 0.99 from 0.90 (including the origination fee) for 80% loans.
Later today, at 1:00 pm Treasury will auction $29B of 7 yr notes. So far the 2 yr and 5 yr auctions were marginal at best. Today's auction closer to the long end of the curve will be closely watched by traders, another soft auction will likely add conviction that interest rates are on the way higher.
At 9:30 the DJIA opened +46, the 10 yr note traded +1/32, mortgage prices +4/32 (.12 bp) frm yesterday's close. Although the ADP report and the open in the equity markets would pressure to rate markets, interest rate markets have been in a slow free-fall for the past eight sessions and are now momentarily technically oversold. The potential for some improvement is high but in the wider perspective any rebound in rates will be seen as a selling opportunity by traders. The ECB about to increase rates along with many of the economies of the world, inflation concerns increasing albeit slowly, and as the calendar ticks off we get closer to the end of all of the Fed's easing moves with QE 2 ending in June. Markets will not wait to the end and will have to consider how markets will absorb the shortfall when the Fed stops buying treasuries.
Should be quiet the rest of the morning until the 7 yr note auction is completed at 1:00. Oversold momentum oscillators likely to keep traders still until another shoe drops (i.e., a poor 7 yr auction or stronger economic data when the official employment report for March hits Friday morning). Although some rebound can't be ignored, the rate markets will not likely loose their bearish outlook.
Tuesday, March 29, 2011
Zero Percent Financing: How It Can Damage Your Credit
Zero percent financing deals are popping up left and right these days, with interest rates at historic lows and retailers desperate to boost sales. A friend of mine from college recently wrote to me, asking for some advice on whether to go for this kind of deal. He asks:
I'm thinking of buying a new television and noticed that there are zero percent financing options available. I have the cash in my savings to buy the product outright, but at zero percent I can easily pay it off in a year without dipping into savings. Are there any cons to this? I don't have many revolving accounts, but I suppose it could hurt my credit score.
The good news is, zero percent financing is like free money for 12 months. But there are numerous downsides that can make these offers a bust from a credit perspective. I tapped my friend and colleague John Ulzheimer, the credit guru at Credit.com, for some added advice. Here's the scoop:
Zero percent financing offers from retailers can adversely affect your credit score mainly due to the following:
• You could be ramping up your credit "utilization" percentage. When you finance a purchase from a retailer, they may open a store credit card in your name for the exact amount of the purchase. The store then charges up the newly opened account, maxing out the credit limit. Not good. Thirty percent of your FICO score is based on data that include your utilization ratio, according to myfico.com. This is equal to the amount of unpaid credit card balances as a percentage of the credit card limits in your name. You want to keep this utilization under 10% if your goal is to keep your score well into the 700s. In fact, according to FICO, consumers who have scores above 760 have an average credit card utilization of just 7%. If you pay off the debt in full in month one this won't bang up your score for more than that month. But psychologically we may be tempted to let that balance sit for 11 months (since there's no interest) and pay it in the final month, during which time this "stagnant" debt can cause a continued drag on your score, says John. "Having a maxed out credit card on your credit report for 11 months doesn't do you scores any good," he says.
• You're applying for new credit. A credit inquiry by a retailer can hurt your credit score, especially if you are requesting new credit several times in a short period of time. The inquiry will stay on your report for up to 2 years and can hurt your score for the first 12 months, according to John.
• You're opening up a new account, which will eventually be reported to the credit reporting agencies. "This lessens the average age of your credit file," says John. The length of your credit history is about 15% of your credit score.
A better alternative? Since my friend has the money (and I would add that he should only make this purchase if he can afford to dip into savings), he may want to pay for the TV using a rewards card that's already in his wallet. And of course, he should pay off the debt in full when the statement shows up. This way, as John says, "You can leave your credit report and score out of the equation."
Zero percent financing deals are popping up left and right these days, with interest rates at historic lows and retailers desperate to boost sales. A friend of mine from college recently wrote to me, asking for some advice on whether to go for this kind of deal. He asks:
I'm thinking of buying a new television and noticed that there are zero percent financing options available. I have the cash in my savings to buy the product outright, but at zero percent I can easily pay it off in a year without dipping into savings. Are there any cons to this? I don't have many revolving accounts, but I suppose it could hurt my credit score.
The good news is, zero percent financing is like free money for 12 months. But there are numerous downsides that can make these offers a bust from a credit perspective. I tapped my friend and colleague John Ulzheimer, the credit guru at Credit.com, for some added advice. Here's the scoop:
Zero percent financing offers from retailers can adversely affect your credit score mainly due to the following:
• You could be ramping up your credit "utilization" percentage. When you finance a purchase from a retailer, they may open a store credit card in your name for the exact amount of the purchase. The store then charges up the newly opened account, maxing out the credit limit. Not good. Thirty percent of your FICO score is based on data that include your utilization ratio, according to myfico.com. This is equal to the amount of unpaid credit card balances as a percentage of the credit card limits in your name. You want to keep this utilization under 10% if your goal is to keep your score well into the 700s. In fact, according to FICO, consumers who have scores above 760 have an average credit card utilization of just 7%. If you pay off the debt in full in month one this won't bang up your score for more than that month. But psychologically we may be tempted to let that balance sit for 11 months (since there's no interest) and pay it in the final month, during which time this "stagnant" debt can cause a continued drag on your score, says John. "Having a maxed out credit card on your credit report for 11 months doesn't do you scores any good," he says.
• You're applying for new credit. A credit inquiry by a retailer can hurt your credit score, especially if you are requesting new credit several times in a short period of time. The inquiry will stay on your report for up to 2 years and can hurt your score for the first 12 months, according to John.
• You're opening up a new account, which will eventually be reported to the credit reporting agencies. "This lessens the average age of your credit file," says John. The length of your credit history is about 15% of your credit score.
A better alternative? Since my friend has the money (and I would add that he should only make this purchase if he can afford to dip into savings), he may want to pay for the TV using a rewards card that's already in his wallet. And of course, he should pay off the debt in full when the statement shows up. This way, as John says, "You can leave your credit report and score out of the equation."
Zero Percent Financing: How It Can Damage Your Credit
Zero percent financing deals are popping up left and right these days, with interest rates at historic lows and retailers desperate to boost sales. A friend of mine from college recently wrote to me, asking for some advice on whether to go for this kind of deal. He asks:
I'm thinking of buying a new television and noticed that there are zero percent financing options available. I have the cash in my savings to buy the product outright, but at zero percent I can easily pay it off in a year without dipping into savings. Are there any cons to this? I don't have many revolving accounts, but I suppose it could hurt my credit score.
The good news is, zero percent financing is like free money for 12 months. But there are numerous downsides that can make these offers a bust from a credit perspective. I tapped my friend and colleague John Ulzheimer, the credit guru at Credit.com, for some added advice. Here's the scoop:
Zero percent financing offers from retailers can adversely affect your credit score mainly due to the following:
• You could be ramping up your credit "utilization" percentage. When you finance a purchase from a retailer, they may open a store credit card in your name for the exact amount of the purchase. The store then charges up the newly opened account, maxing out the credit limit. Not good. Thirty percent of your FICO score is based on data that include your utilization ratio, according to myfico.com. This is equal to the amount of unpaid credit card balances as a percentage of the credit card limits in your name. You want to keep this utilization under 10% if your goal is to keep your score well into the 700s. In fact, according to FICO, consumers who have scores above 760 have an average credit card utilization of just 7%. If you pay off the debt in full in month one this won't bang up your score for more than that month. But psychologically we may be tempted to let that balance sit for 11 months (since there's no interest) and pay it in the final month, during which time this "stagnant" debt can cause a continued drag on your score, says John. "Having a maxed out credit card on your credit report for 11 months doesn't do you scores any good," he says.
• You're applying for new credit. A credit inquiry by a retailer can hurt your credit score, especially if you are requesting new credit several times in a short period of time. The inquiry will stay on your report for up to 2 years and can hurt your score for the first 12 months, according to John.
• You're opening up a new account, which will eventually be reported to the credit reporting agencies. "This lessens the average age of your credit file," says John. The length of your credit history is about 15% of your credit score.
A better alternative? Since my friend has the money (and I would add that he should only make this purchase if he can afford to dip into savings), he may want to pay for the TV using a rewards card that's already in his wallet. And of course, he should pay off the debt in full when the statement shows up. This way, as John says, "You can leave your credit report and score out of the equation."
I'm thinking of buying a new television and noticed that there are zero percent financing options available. I have the cash in my savings to buy the product outright, but at zero percent I can easily pay it off in a year without dipping into savings. Are there any cons to this? I don't have many revolving accounts, but I suppose it could hurt my credit score.
The good news is, zero percent financing is like free money for 12 months. But there are numerous downsides that can make these offers a bust from a credit perspective. I tapped my friend and colleague John Ulzheimer, the credit guru at Credit.com, for some added advice. Here's the scoop:
Zero percent financing offers from retailers can adversely affect your credit score mainly due to the following:
• You could be ramping up your credit "utilization" percentage. When you finance a purchase from a retailer, they may open a store credit card in your name for the exact amount of the purchase. The store then charges up the newly opened account, maxing out the credit limit. Not good. Thirty percent of your FICO score is based on data that include your utilization ratio, according to myfico.com. This is equal to the amount of unpaid credit card balances as a percentage of the credit card limits in your name. You want to keep this utilization under 10% if your goal is to keep your score well into the 700s. In fact, according to FICO, consumers who have scores above 760 have an average credit card utilization of just 7%. If you pay off the debt in full in month one this won't bang up your score for more than that month. But psychologically we may be tempted to let that balance sit for 11 months (since there's no interest) and pay it in the final month, during which time this "stagnant" debt can cause a continued drag on your score, says John. "Having a maxed out credit card on your credit report for 11 months doesn't do you scores any good," he says.
• You're applying for new credit. A credit inquiry by a retailer can hurt your credit score, especially if you are requesting new credit several times in a short period of time. The inquiry will stay on your report for up to 2 years and can hurt your score for the first 12 months, according to John.
• You're opening up a new account, which will eventually be reported to the credit reporting agencies. "This lessens the average age of your credit file," says John. The length of your credit history is about 15% of your credit score.
A better alternative? Since my friend has the money (and I would add that he should only make this purchase if he can afford to dip into savings), he may want to pay for the TV using a rewards card that's already in his wallet. And of course, he should pay off the debt in full when the statement shows up. This way, as John says, "You can leave your credit report and score out of the equation."
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, March 29, 2011
Treasuries and mortgages were mostly flat yesterday with mortgage prices about .09 bp better. This morning the 10 yr note off a little at 9:00 with mortgage prices down .09 bp. Stock indexes yesterday were slightly lower, this morning opening a little better. Overall since Friday's closes markets are relatively unchanged. At 9:00 the Case/Shiller home prices were weaker as expected; the 20 city home prices fell 0.2%, yr/yr -3.1%, the biggest year-over-year decrease since December 2009; the 10 city prices yr/yr down 2.0%. Estimates for the price change for the 20 cities ranged from declines of 3.7% to 2.4%, according to the forecasts of 29 economists Media makes some noise over the monthly report; it is two months old and unless you live in the 20 cities it is meaningless, real estate is a local issue.
At 10:00 a more important data point; the Mar consumer confidence index from the Conference Board. Forecasts were for confidence to have slipped from 70.4 in Feb to 65 in March, as reported at 63.4 frm 72.0 revised from 70.4. The present situation index better at 36.9 frm 33.8 in Feb, expectations index at 81.1 frm 97.5 and the inflation index at 6.7 frm 5.6 in Feb, the highest reading since Oct 2008 but still anemic.
This afternoon at 1:00 Treasury will sell $35B of 5 yr notes, yesterday's $35B of 2 yr notes was so-so, not bad but not strongly bid either. Today's 5 yr may be another one that is not as strong as we would like to see, the 5 yr sector of the yield curve has been the weakest for the last couple of weeks. The 5 yr is at its highest yield in the past three weeks so that may entice investors some.
St Louis Fed Pres Bullard out again with comments that the Fed may be able to cut $100B from the QE 2 $600B treasury buying that is scheduled to be completed at the end of June. Bullard has been generally opposed to the QE by the Fed. Fed officials have purchased $1.7 trillion of mortgage debt and Treasuries through March 2010 to pull the U.S. out of the recession. The Fed’s second round of purchases has come under fire from Republican leaders in Congress who say it risks inflating asset-price bubbles and stoking inflation. “One of the things that I am concerned about is that the policy is so easy right now, that we have to get started on the process of going back to normal because it will take a long time to do that,” he said.
Debate is increasing within the Fed about when to end its support through quantative easing. Various Fed officials are saying the easing must continue as the economic recovery is still fragile while others want it ended soon and that the Fed should begin tightening to fend off inflation which so far isn't being seen. In Europe however the ECB is about to start tightening and increasing rates following China, Brazil, India and Russia. Hard to handicap at the moment but it is increasingly unlikely interest rates in the US will decline and more likely begin to creep higher.
After trading weaker this morning, by 9:45 the 10 yr note moved back to unchanged and mortgages off .12 bp at 9:00 were unchanged. The stock market opened a little better but backed off and went negative at 9:45 supporting the move up in interest rate prices. Likely to be quiet this morning until we get the results of how the 5 yr auction went. The MBS prices below are at 9:30, since then prices improved from -3/32 to +3/32 at 9:45 a gain of .18 bp frm initial pricing by lenders.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, March 29, 2011
Treasuries and mortgages were mostly flat yesterday with mortgage prices about .09 bp better. This morning the 10 yr note off a little at 9:00 with mortgage prices down .09 bp. Stock indexes yesterday were slightly lower, this morning opening a little better. Overall since Friday's closes markets are relatively unchanged. At 9:00 the Case/Shiller home prices were weaker as expected; the 20 city home prices fell 0.2%, yr/yr -3.1%, the biggest year-over-year decrease since December 2009; the 10 city prices yr/yr down 2.0%. Estimates for the price change for the 20 cities ranged from declines of 3.7% to 2.4%, according to the forecasts of 29 economists Media makes some noise over the monthly report; it is two months old and unless you live in the 20 cities it is meaningless, real estate is a local issue.
At 10:00 a more important data point; the Mar consumer confidence index from the Conference Board. Forecasts were for confidence to have slipped from 70.4 in Feb to 65 in March, as reported at 63.4 frm 72.0 revised from 70.4. The present situation index better at 36.9 frm 33.8 in Feb, expectations index at 81.1 frm 97.5 and the inflation index at 6.7 frm 5.6 in Feb, the highest reading since Oct 2008 but still anemic.
This afternoon at 1:00 Treasury will sell $35B of 5 yr notes, yesterday's $35B of 2 yr notes was so-so, not bad but not strongly bid either. Today's 5 yr may be another one that is not as strong as we would like to see, the 5 yr sector of the yield curve has been the weakest for the last couple of weeks. The 5 yr is at its highest yield in the past three weeks so that may entice investors some.
St Louis Fed Pres Bullard out again with comments that the Fed may be able to cut $100B from the QE 2 $600B treasury buying that is scheduled to be completed at the end of June. Bullard has been generally opposed to the QE by the Fed. Fed officials have purchased $1.7 trillion of mortgage debt and Treasuries through March 2010 to pull the U.S. out of the recession. The Fed’s second round of purchases has come under fire from Republican leaders in Congress who say it risks inflating asset-price bubbles and stoking inflation. “One of the things that I am concerned about is that the policy is so easy right now, that we have to get started on the process of going back to normal because it will take a long time to do that,” he said.
Debate is increasing within the Fed about when to end its support through quantative easing. Various Fed officials are saying the easing must continue as the economic recovery is still fragile while others want it ended soon and that the Fed should begin tightening to fend off inflation which so far isn't being seen. In Europe however the ECB is about to start tightening and increasing rates following China, Brazil, India and Russia. Hard to handicap at the moment but it is increasingly unlikely interest rates in the US will decline and more likely begin to creep higher.
After trading weaker this morning, by 9:45 the 10 yr note moved back to unchanged and mortgages off .12 bp at 9:00 were unchanged. The stock market opened a little better but backed off and went negative at 9:45 supporting the move up in interest rate prices. Likely to be quiet this morning until we get the results of how the 5 yr auction went. The MBS prices below are at 9:30, since then prices improved from -3/32 to +3/32 at 9:45 a gain of .18 bp frm initial pricing by lenders.
Monday, March 28, 2011
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Monday, March 28, 2011
More selling in the rate markets this morning; as we have noted recently interest rates are headed higher after all the safety moves triggered by Japan's problems. The stock market took a heavy hit on panic selling over Japan but is now trading better than prior to the earthquakes and tsunami. Interest rates also higher than prior to the issues. In Japan over the weekend, a lot of contaminated water surrounding the reactors and calls for the head of the power company to resign as the inability to provide accurate information or know what is happening has finally pushed the normally placid Japanese government to push for a change in leadership.
This morning at 8:30 Feb personal income and spending were reported; income was expected to have increased 0.3% it was on target, spending expected up 0.5% increased 0.7%. Personal savings was up 5.8% for the month but down from +6.1% in Jan. The PCE price index increased 0.6% and yr/yr +2.1%; the highest monthly increase on the PCE since June 2009 and the highest yr/yr since May 2010. ON the release interest rate prices already lower were knocked a little lower.
The DJIA opened a little better (+11), not much but still starting higher after last week's strong rally increasing 362, NASDAQ +99 last week and S&P +35. All indexes now above levels prior to Japan.
At 10:00 Jan pending home sales, sales with contracts signed but not yet closed, was expected up 0.3% after falling 2.8% in Jan. increased 2.1% but yr/yr still down 8.2%. No initial reaction to the report.
This afternoon at 1:00 pm Treasury begins its monthly 2, 5, and 7 yr auctions with $35B of 2 yr notes. Should go well given the recent increase in rates, its a 2 yr and generally does get decent demand.
This Week's Economic Calendar:
Tuesday;
9:00 am Jan Case/Shiller 20 city home price index (-3.3%)
10:00 am Mar consumer confidence index (65.0 frm 70.4)
1:00 pm $35B 5 yr note auction
Wednesday;
7:00 am weekly MBA mortgage applications
8:15 am ADP non-farm private jobs estimate for March (210K)
1:00 pm $29B 7 yr note auction
Thursday;
8:30 am weekly jobless claims (383K -1K; continuing claims 3.70 mil frm 3.721 mil)
9:45 am Mar Chicago purchasing mgrs index (69.5 frm 71.2 in Feb)
10:00 am Feb factory orders (+0.4%)
Friday:
8:30 am March employment data (non-farm jobs +185K, non-farm private jobs +203K, unemployment rate unch at 8.9%)
10:00 am March Nat'l ISM manufacturing index (61.4 unch frm Feb)
Feb construction spending (-0.7%)
3:00 pm March auto and truck sales (N/A)
Last week St Louis Fed Bullard suggested the Fed should review whether to curtail plans to buy $600B in Treasuries (QE 2) because of strong economic data. His remarks added additional reason for selling the bond and mortgage markets. While we don't think the Fed will actually cut the intended $600B of purchases scheduled to end at the end of June, we do not believe there will be anymore quantative easing from the Fed. Although there are 90 days left for Fed purchases markets won't sit tight until the end comes. Traders already moving to discount the end and concerns about who will pick up the slack in private markets once the Fed finishes; $10B a month by the Fed needs that much more demand. That is unlikely at the present interest rate levels. We have note for a week that rates would increase, although they did last week we are not expecting an explosion in rates. Looking for the 10 yr note and mortgage rtes for 30 yr fixed to be up about 50 basis points from present levels by the end of the year.
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Monday, March 28, 2011
More selling in the rate markets this morning; as we have noted recently interest rates are headed higher after all the safety moves triggered by Japan's problems. The stock market took a heavy hit on panic selling over Japan but is now trading better than prior to the earthquakes and tsunami. Interest rates also higher than prior to the issues. In Japan over the weekend, a lot of contaminated water surrounding the reactors and calls for the head of the power company to resign as the inability to provide accurate information or know what is happening has finally pushed the normally placid Japanese government to push for a change in leadership.
This morning at 8:30 Feb personal income and spending were reported; income was expected to have increased 0.3% it was on target, spending expected up 0.5% increased 0.7%. Personal savings was up 5.8% for the month but down from +6.1% in Jan. The PCE price index increased 0.6% and yr/yr +2.1%; the highest monthly increase on the PCE since June 2009 and the highest yr/yr since May 2010. ON the release interest rate prices already lower were knocked a little lower.
The DJIA opened a little better (+11), not much but still starting higher after last week's strong rally increasing 362, NASDAQ +99 last week and S&P +35. All indexes now above levels prior to Japan.
At 10:00 Jan pending home sales, sales with contracts signed but not yet closed, was expected up 0.3% after falling 2.8% in Jan. increased 2.1% but yr/yr still down 8.2%. No initial reaction to the report.
This afternoon at 1:00 pm Treasury begins its monthly 2, 5, and 7 yr auctions with $35B of 2 yr notes. Should go well given the recent increase in rates, its a 2 yr and generally does get decent demand.
This Week's Economic Calendar:
Tuesday;
9:00 am Jan Case/Shiller 20 city home price index (-3.3%)
10:00 am Mar consumer confidence index (65.0 frm 70.4)
1:00 pm $35B 5 yr note auction
Wednesday;
7:00 am weekly MBA mortgage applications
8:15 am ADP non-farm private jobs estimate for March (210K)
1:00 pm $29B 7 yr note auction
Thursday;
8:30 am weekly jobless claims (383K -1K; continuing claims 3.70 mil frm 3.721 mil)
9:45 am Mar Chicago purchasing mgrs index (69.5 frm 71.2 in Feb)
10:00 am Feb factory orders (+0.4%)
Friday:
8:30 am March employment data (non-farm jobs +185K, non-farm private jobs +203K, unemployment rate unch at 8.9%)
10:00 am March Nat'l ISM manufacturing index (61.4 unch frm Feb)
Feb construction spending (-0.7%)
3:00 pm March auto and truck sales (N/A)
Last week St Louis Fed Bullard suggested the Fed should review whether to curtail plans to buy $600B in Treasuries (QE 2) because of strong economic data. His remarks added additional reason for selling the bond and mortgage markets. While we don't think the Fed will actually cut the intended $600B of purchases scheduled to end at the end of June, we do not believe there will be anymore quantative easing from the Fed. Although there are 90 days left for Fed purchases markets won't sit tight until the end comes. Traders already moving to discount the end and concerns about who will pick up the slack in private markets once the Fed finishes; $10B a month by the Fed needs that much more demand. That is unlikely at the present interest rate levels. We have note for a week that rates would increase, although they did last week we are not expecting an explosion in rates. Looking for the 10 yr note and mortgage rtes for 30 yr fixed to be up about 50 basis points from present levels by the end of the year.
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Monday, March 28, 2011
More selling in the rate markets this morning; as we have noted recently interest rates are headed higher after all the safety moves triggered by Japan's problems. The stock market took a heavy hit on panic selling over Japan but is now trading better than prior to the earthquakes and tsunami. Interest rates also higher than prior to the issues. In Japan over the weekend, a lot of contaminated water surrounding the reactors and calls for the head of the power company to resign as the inability to provide accurate information or know what is happening has finally pushed the normally placid Japanese government to push for a change in leadership.
This morning at 8:30 Feb personal income and spending were reported; income was expected to have increased 0.3% it was on target, spending expected up 0.5% increased 0.7%. Personal savings was up 5.8% for the month but down from +6.1% in Jan. The PCE price index increased 0.6% and yr/yr +2.1%; the highest monthly increase on the PCE since June 2009 and the highest yr/yr since May 2010. ON the release interest rate prices already lower were knocked a little lower.
The DJIA opened a little better (+11), not much but still starting higher after last week's strong rally increasing 362, NASDAQ +99 last week and S&P +35. All indexes now above levels prior to Japan.
At 10:00 Jan pending home sales, sales with contracts signed but not yet closed, was expected up 0.3% after falling 2.8% in Jan. increased 2.1% but yr/yr still down 8.2%. No initial reaction to the report.
This afternoon at 1:00 pm Treasury begins its monthly 2, 5, and 7 yr auctions with $35B of 2 yr notes. Should go well given the recent increase in rates, its a 2 yr and generally does get decent demand.
This Week's Economic Calendar:
Tuesday;
9:00 am Jan Case/Shiller 20 city home price index (-3.3%)
10:00 am Mar consumer confidence index (65.0 frm 70.4)
1:00 pm $35B 5 yr note auction
Wednesday;
7:00 am weekly MBA mortgage applications
8:15 am ADP non-farm private jobs estimate for March (210K)
1:00 pm $29B 7 yr note auction
Thursday;
8:30 am weekly jobless claims (383K -1K; continuing claims 3.70 mil frm 3.721 mil)
9:45 am Mar Chicago purchasing mgrs index (69.5 frm 71.2 in Feb)
10:00 am Feb factory orders (+0.4%)
Friday:
8:30 am March employment data (non-farm jobs +185K, non-farm private jobs +203K, unemployment rate unch at 8.9%)
10:00 am March Nat'l ISM manufacturing index (61.4 unch frm Feb)
Feb construction spending (-0.7%)
3:00 pm March auto and truck sales (N/A)
Last week St Louis Fed Bullard suggested the Fed should review whether to curtail plans to buy $600B in Treasuries (QE 2) because of strong economic data. His remarks added additional reason for selling the bond and mortgage markets. While we don't think the Fed will actually cut the intended $600B of purchases scheduled to end at the end of June, we do not believe there will be anymore quantative easing from the Fed. Although there are 90 days left for Fed purchases markets won't sit tight until the end comes. Traders already moving to discount the end and concerns about who will pick up the slack in private markets once the Fed finishes; $10B a month by the Fed needs that much more demand. That is unlikely at the present interest rate levels. We have note for a week that rates would increase, although they did last week we are not expecting an explosion in rates. Looking for the 10 yr note and mortgage rtes for 30 yr fixed to be up about 50 basis points from present levels by the end of the year.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Monday, March 28, 2011
More selling in the rate markets this morning; as we have noted recently interest rates are headed higher after all the safety moves triggered by Japan's problems. The stock market took a heavy hit on panic selling over Japan but is now trading better than prior to the earthquakes and tsunami. Interest rates also higher than prior to the issues. In Japan over the weekend, a lot of contaminated water surrounding the reactors and calls for the head of the power company to resign as the inability to provide accurate information or know what is happening has finally pushed the normally placid Japanese government to push for a change in leadership.
This morning at 8:30 Feb personal income and spending were reported; income was expected to have increased 0.3% it was on target, spending expected up 0.5% increased 0.7%. Personal savings was up 5.8% for the month but down from +6.1% in Jan. The PCE price index increased 0.6% and yr/yr +2.1%; the highest monthly increase on the PCE since June 2009 and the highest yr/yr since May 2010. ON the release interest rate prices already lower were knocked a little lower.
The DJIA opened a little better (+11), not much but still starting higher after last week's strong rally increasing 362, NASDAQ +99 last week and S&P +35. All indexes now above levels prior to Japan.
At 10:00 Jan pending home sales, sales with contracts signed but not yet closed, was expected up 0.3% after falling 2.8% in Jan. increased 2.1% but yr/yr still down 8.2%. No initial reaction to the report.
This afternoon at 1:00 pm Treasury begins its monthly 2, 5, and 7 yr auctions with $35B of 2 yr notes. Should go well given the recent increase in rates, its a 2 yr and generally does get decent demand.
This Week's Economic Calendar:
Tuesday;
9:00 am Jan Case/Shiller 20 city home price index (-3.3%)
10:00 am Mar consumer confidence index (65.0 frm 70.4)
1:00 pm $35B 5 yr note auction
Wednesday;
7:00 am weekly MBA mortgage applications
8:15 am ADP non-farm private jobs estimate for March (210K)
1:00 pm $29B 7 yr note auction
Thursday;
8:30 am weekly jobless claims (383K -1K; continuing claims 3.70 mil frm 3.721 mil)
9:45 am Mar Chicago purchasing mgrs index (69.5 frm 71.2 in Feb)
10:00 am Feb factory orders (+0.4%)
Friday:
8:30 am March employment data (non-farm jobs +185K, non-farm private jobs +203K, unemployment rate unch at 8.9%)
10:00 am March Nat'l ISM manufacturing index (61.4 unch frm Feb)
Feb construction spending (-0.7%)
3:00 pm March auto and truck sales (N/A)
Last week St Louis Fed Bullard suggested the Fed should review whether to curtail plans to buy $600B in Treasuries (QE 2) because of strong economic data. His remarks added additional reason for selling the bond and mortgage markets. While we don't think the Fed will actually cut the intended $600B of purchases scheduled to end at the end of June, we do not believe there will be anymore quantative easing from the Fed. Although there are 90 days left for Fed purchases markets won't sit tight until the end comes. Traders already moving to discount the end and concerns about who will pick up the slack in private markets once the Fed finishes; $10B a month by the Fed needs that much more demand. That is unlikely at the present interest rate levels. We have note for a week that rates would increase, although they did last week we are not expecting an explosion in rates. Looking for the 10 yr note and mortgage rtes for 30 yr fixed to be up about 50 basis points from present levels by the end of the year.
Sunday, March 27, 2011
Saturday, March 26, 2011
Friday, March 25, 2011
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Friday, March 25, 2011
Treasuries and mortgages opened flat this morning while the stock index futures were aiming at a better open at 9:30. At 8:30 the final Q4 GDP was better than expected, from +2.8% to up 3.1% with expectations of an increase to 2.9%. Consumer spending, about 70% of the economy, rose 4.0% last quarter, the most since the same three months in 2006, compared with 4.1% previously estimated and a 2.4% rate in the third quarter. It is old news however, Q1 has about ended; nevertheless equity markets were boosted a little that the economy was actually stronger than what the market had traded. Q1 is likely to drag some with oil prices increasing and supplies of components that are made in Japan have slowed.
At 9:30 the stock market opened +22 on the DJIA, the 10 yr note up 4/32 at 3.40% and mortgage prices at 9:30 +4/32 (.12 bp).
Japan suffered another 6.2 after shock overnight. The Prime Minister said the problems at the nuclear power plants is serious and grave and not yet near under control. It has been two weeks since the initial quake and tsunami, the stock market took a huge hit on the reaction but the key stock indexes are now trading at or above where they were prior to disaster. Our markets also appear to be ignoring turmoil in the Mideast and Libya as the equity markets keep improving and the bond market that got a safe haven boost is now back to yields prior to the earthquake. Today in Germany business confidence didn't fall as much as analysts were expecting, more evidence that Japan's tragedy hasn't hurt the economic outlook in Europe either.
At 9:55 the Reuters/U.of Michigan consumer sentiment index expected at 68.0 frm 68.2 two weeks ago fell to 67.7, the lowest level since Nov 2009. The index at the end of Feb was 77.5 so a big drop in this very volatile series. The expectations index fell to 57.9 frm 58.3 the lowest since March 2009; the current conditions component at 82.5 frm 83.6 and the 12 month out index to 60.0 frm 64.0. Even though weaker the initial reaction didn't hamper stocks or improve the bond and mortgage markets.
Technically, the 10 yr note has minor support at 3.40% where its 20 day MA is and on the chart support. The rate markets have seen prices decline for seven days now as markets shrug off the implications of Japan's disaster and the unsettled Mideast situation and Libya's civil war.
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Friday, March 25, 2011
Treasuries and mortgages opened flat this morning while the stock index futures were aiming at a better open at 9:30. At 8:30 the final Q4 GDP was better than expected, from +2.8% to up 3.1% with expectations of an increase to 2.9%. Consumer spending, about 70% of the economy, rose 4.0% last quarter, the most since the same three months in 2006, compared with 4.1% previously estimated and a 2.4% rate in the third quarter. It is old news however, Q1 has about ended; nevertheless equity markets were boosted a little that the economy was actually stronger than what the market had traded. Q1 is likely to drag some with oil prices increasing and supplies of components that are made in Japan have slowed.
At 9:30 the stock market opened +22 on the DJIA, the 10 yr note up 4/32 at 3.40% and mortgage prices at 9:30 +4/32 (.12 bp).
Japan suffered another 6.2 after shock overnight. The Prime Minister said the problems at the nuclear power plants is serious and grave and not yet near under control. It has been two weeks since the initial quake and tsunami, the stock market took a huge hit on the reaction but the key stock indexes are now trading at or above where they were prior to disaster. Our markets also appear to be ignoring turmoil in the Mideast and Libya as the equity markets keep improving and the bond market that got a safe haven boost is now back to yields prior to the earthquake. Today in Germany business confidence didn't fall as much as analysts were expecting, more evidence that Japan's tragedy hasn't hurt the economic outlook in Europe either.
At 9:55 the Reuters/U.of Michigan consumer sentiment index expected at 68.0 frm 68.2 two weeks ago fell to 67.7, the lowest level since Nov 2009. The index at the end of Feb was 77.5 so a big drop in this very volatile series. The expectations index fell to 57.9 frm 58.3 the lowest since March 2009; the current conditions component at 82.5 frm 83.6 and the 12 month out index to 60.0 frm 64.0. Even though weaker the initial reaction didn't hamper stocks or improve the bond and mortgage markets.
Technically, the 10 yr note has minor support at 3.40% where its 20 day MA is and on the chart support. The rate markets have seen prices decline for seven days now as markets shrug off the implications of Japan's disaster and the unsettled Mideast situation and Libya's civil war.
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Friday, March 25, 2011
Treasuries and mortgages opened flat this morning while the stock index futures were aiming at a better open at 9:30. At 8:30 the final Q4 GDP was better than expected, from +2.8% to up 3.1% with expectations of an increase to 2.9%. Consumer spending, about 70% of the economy, rose 4.0% last quarter, the most since the same three months in 2006, compared with 4.1% previously estimated and a 2.4% rate in the third quarter. It is old news however, Q1 has about ended; nevertheless equity markets were boosted a little that the economy was actually stronger than what the market had traded. Q1 is likely to drag some with oil prices increasing and supplies of components that are made in Japan have slowed.
At 9:30 the stock market opened +22 on the DJIA, the 10 yr note up 4/32 at 3.40% and mortgage prices at 9:30 +4/32 (.12 bp).
Japan suffered another 6.2 after shock overnight. The Prime Minister said the problems at the nuclear power plants is serious and grave and not yet near under control. It has been two weeks since the initial quake and tsunami, the stock market took a huge hit on the reaction but the key stock indexes are now trading at or above where they were prior to disaster. Our markets also appear to be ignoring turmoil in the Mideast and Libya as the equity markets keep improving and the bond market that got a safe haven boost is now back to yields prior to the earthquake. Today in Germany business confidence didn't fall as much as analysts were expecting, more evidence that Japan's tragedy hasn't hurt the economic outlook in Europe either.
At 9:55 the Reuters/U.of Michigan consumer sentiment index expected at 68.0 frm 68.2 two weeks ago fell to 67.7, the lowest level since Nov 2009. The index at the end of Feb was 77.5 so a big drop in this very volatile series. The expectations index fell to 57.9 frm 58.3 the lowest since March 2009; the current conditions component at 82.5 frm 83.6 and the 12 month out index to 60.0 frm 64.0. Even though weaker the initial reaction didn't hamper stocks or improve the bond and mortgage markets.
Technically, the 10 yr note has minor support at 3.40% where its 20 day MA is and on the chart support. The rate markets have seen prices decline for seven days now as markets shrug off the implications of Japan's disaster and the unsettled Mideast situation and Libya's civil war.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Friday, March 25, 2011
Treasuries and mortgages opened flat this morning while the stock index futures were aiming at a better open at 9:30. At 8:30 the final Q4 GDP was better than expected, from +2.8% to up 3.1% with expectations of an increase to 2.9%. Consumer spending, about 70% of the economy, rose 4.0% last quarter, the most since the same three months in 2006, compared with 4.1% previously estimated and a 2.4% rate in the third quarter. It is old news however, Q1 has about ended; nevertheless equity markets were boosted a little that the economy was actually stronger than what the market had traded. Q1 is likely to drag some with oil prices increasing and supplies of components that are made in Japan have slowed.
At 9:30 the stock market opened +22 on the DJIA, the 10 yr note up 4/32 at 3.40% and mortgage prices at 9:30 +4/32 (.12 bp).
Japan suffered another 6.2 after shock overnight. The Prime Minister said the problems at the nuclear power plants is serious and grave and not yet near under control. It has been two weeks since the initial quake and tsunami, the stock market took a huge hit on the reaction but the key stock indexes are now trading at or above where they were prior to disaster. Our markets also appear to be ignoring turmoil in the Mideast and Libya as the equity markets keep improving and the bond market that got a safe haven boost is now back to yields prior to the earthquake. Today in Germany business confidence didn't fall as much as analysts were expecting, more evidence that Japan's tragedy hasn't hurt the economic outlook in Europe either.
At 9:55 the Reuters/U.of Michigan consumer sentiment index expected at 68.0 frm 68.2 two weeks ago fell to 67.7, the lowest level since Nov 2009. The index at the end of Feb was 77.5 so a big drop in this very volatile series. The expectations index fell to 57.9 frm 58.3 the lowest since March 2009; the current conditions component at 82.5 frm 83.6 and the 12 month out index to 60.0 frm 64.0. Even though weaker the initial reaction didn't hamper stocks or improve the bond and mortgage markets.
Technically, the 10 yr note has minor support at 3.40% where its 20 day MA is and on the chart support. The rate markets have seen prices decline for seven days now as markets shrug off the implications of Japan's disaster and the unsettled Mideast situation and Libya's civil war.
Thursday, March 24, 2011
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time
.
Thursday, March 24, 2011
Two data points this morning; weekly jobless claims were slightly better than expected, down 5K to 382K. Weekly claims continue to decline slowly nevertheless it is a plus for the economic outlook. Continuing claims fell to 3.721 mil frm 3.723 mil last week while the smoothing 4 wk average on claims declined to 385,250 frm 386,750, the lowest average since July 2008. Also at 8:30 but somewhat disappointing Feb durable goods orders; expected to be up 1.1% were reported down 0.9%. Taking the volatile transportation orders away durables were expected to be up 1.8% but were down 0.6%. Companies may be tempering their purchases of new equipment until further signs emerge that the recovery is broadening. Shipments of non-defense capital goods excluding aircraft, used in calculating gross domestic product, increased 0.8% after falling 2.3% in January.
Prior to the two 8:30 reports treasuries and mortgages were trading slightly weaker, stock indexes were slightly better. There was little reaction in both markets to the data; at 9:00 the 10 yr -6/32 3.37% +2 bp and mortgage prices -4/32 (.12 bp). At 9:00 the DJIA +61, crude oil at $106.11 +$0.37, gold up $1.50. Overall quiet again this morning, markets settling a little after the big swings on Japan and Libya.
Yesterday a lot was made of Portugal's parliament rejecting the austerity plans put forth by Portugal's Prime Minister; as he said he would if parliament rejected his plan, he tendered his resignation. There was a lot of talk that Portugal would drag the euro currency down but so far that has not occurred. A bailout for Portugal may total as much as 70 billion euros ($99 billion), said two European officials with direct knowledge of the matter. The country will follow Greece and Ireland needing a bailout. We do not expect any significant market reactions to the issue as it was generally expected and debt issues in Europe are not new news.
In Libya progress is being made; more bombings of ground forces and military equipment after clearing the skies. French Defense Minister Gerard Longuet said the coalition has intercepted conversations among Libyan officers indicating that many are ready to abandon the regime. Comments coming from coalition forces that the intervention may lasts days or weeks, but not months.
Later today (11:00 am) Treasury will announce the amounts for next week's 2 yr, 5 yr and 7 yr note auctions; last month the total $99B is likely what we will see next week also.
At 9:30 the DJIA opened +56, the 10 yr -8/32 3.37% +2 bp and mortgage prices -5/32 (.15 bp). So far this morning markets have been orderly and likely will continue that way the rest of the day. We continue to expect interest rates to struggle at these levels but the rate markets take their marching orders from the equity markets. The stock indexes are now back to where they traded prior to the earthquakes and tsunami in Japan that shook the world and is still causing serious problems with their nuclear power plants not yet under control.
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time
.
Thursday, March 24, 2011
Two data points this morning; weekly jobless claims were slightly better than expected, down 5K to 382K. Weekly claims continue to decline slowly nevertheless it is a plus for the economic outlook. Continuing claims fell to 3.721 mil frm 3.723 mil last week while the smoothing 4 wk average on claims declined to 385,250 frm 386,750, the lowest average since July 2008. Also at 8:30 but somewhat disappointing Feb durable goods orders; expected to be up 1.1% were reported down 0.9%. Taking the volatile transportation orders away durables were expected to be up 1.8% but were down 0.6%. Companies may be tempering their purchases of new equipment until further signs emerge that the recovery is broadening. Shipments of non-defense capital goods excluding aircraft, used in calculating gross domestic product, increased 0.8% after falling 2.3% in January.
Prior to the two 8:30 reports treasuries and mortgages were trading slightly weaker, stock indexes were slightly better. There was little reaction in both markets to the data; at 9:00 the 10 yr -6/32 3.37% +2 bp and mortgage prices -4/32 (.12 bp). At 9:00 the DJIA +61, crude oil at $106.11 +$0.37, gold up $1.50. Overall quiet again this morning, markets settling a little after the big swings on Japan and Libya.
Yesterday a lot was made of Portugal's parliament rejecting the austerity plans put forth by Portugal's Prime Minister; as he said he would if parliament rejected his plan, he tendered his resignation. There was a lot of talk that Portugal would drag the euro currency down but so far that has not occurred. A bailout for Portugal may total as much as 70 billion euros ($99 billion), said two European officials with direct knowledge of the matter. The country will follow Greece and Ireland needing a bailout. We do not expect any significant market reactions to the issue as it was generally expected and debt issues in Europe are not new news.
In Libya progress is being made; more bombings of ground forces and military equipment after clearing the skies. French Defense Minister Gerard Longuet said the coalition has intercepted conversations among Libyan officers indicating that many are ready to abandon the regime. Comments coming from coalition forces that the intervention may lasts days or weeks, but not months.
Later today (11:00 am) Treasury will announce the amounts for next week's 2 yr, 5 yr and 7 yr note auctions; last month the total $99B is likely what we will see next week also.
At 9:30 the DJIA opened +56, the 10 yr -8/32 3.37% +2 bp and mortgage prices -5/32 (.15 bp). So far this morning markets have been orderly and likely will continue that way the rest of the day. We continue to expect interest rates to struggle at these levels but the rate markets take their marching orders from the equity markets. The stock indexes are now back to where they traded prior to the earthquakes and tsunami in Japan that shook the world and is still causing serious problems with their nuclear power plants not yet under control.
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time
.
Thursday, March 24, 2011
Two data points this morning; weekly jobless claims were slightly better than expected, down 5K to 382K. Weekly claims continue to decline slowly nevertheless it is a plus for the economic outlook. Continuing claims fell to 3.721 mil frm 3.723 mil last week while the smoothing 4 wk average on claims declined to 385,250 frm 386,750, the lowest average since July 2008. Also at 8:30 but somewhat disappointing Feb durable goods orders; expected to be up 1.1% were reported down 0.9%. Taking the volatile transportation orders away durables were expected to be up 1.8% but were down 0.6%. Companies may be tempering their purchases of new equipment until further signs emerge that the recovery is broadening. Shipments of non-defense capital goods excluding aircraft, used in calculating gross domestic product, increased 0.8% after falling 2.3% in January.
Prior to the two 8:30 reports treasuries and mortgages were trading slightly weaker, stock indexes were slightly better. There was little reaction in both markets to the data; at 9:00 the 10 yr -6/32 3.37% +2 bp and mortgage prices -4/32 (.12 bp). At 9:00 the DJIA +61, crude oil at $106.11 +$0.37, gold up $1.50. Overall quiet again this morning, markets settling a little after the big swings on Japan and Libya.
Yesterday a lot was made of Portugal's parliament rejecting the austerity plans put forth by Portugal's Prime Minister; as he said he would if parliament rejected his plan, he tendered his resignation. There was a lot of talk that Portugal would drag the euro currency down but so far that has not occurred. A bailout for Portugal may total as much as 70 billion euros ($99 billion), said two European officials with direct knowledge of the matter. The country will follow Greece and Ireland needing a bailout. We do not expect any significant market reactions to the issue as it was generally expected and debt issues in Europe are not new news.
In Libya progress is being made; more bombings of ground forces and military equipment after clearing the skies. French Defense Minister Gerard Longuet said the coalition has intercepted conversations among Libyan officers indicating that many are ready to abandon the regime. Comments coming from coalition forces that the intervention may lasts days or weeks, but not months.
Later today (11:00 am) Treasury will announce the amounts for next week's 2 yr, 5 yr and 7 yr note auctions; last month the total $99B is likely what we will see next week also.
At 9:30 the DJIA opened +56, the 10 yr -8/32 3.37% +2 bp and mortgage prices -5/32 (.15 bp). So far this morning markets have been orderly and likely will continue that way the rest of the day. We continue to expect interest rates to struggle at these levels but the rate markets take their marching orders from the equity markets. The stock indexes are now back to where they traded prior to the earthquakes and tsunami in Japan that shook the world and is still causing serious problems with their nuclear power plants not yet under control.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time
.
Thursday, March 24, 2011
Two data points this morning; weekly jobless claims were slightly better than expected, down 5K to 382K. Weekly claims continue to decline slowly nevertheless it is a plus for the economic outlook. Continuing claims fell to 3.721 mil frm 3.723 mil last week while the smoothing 4 wk average on claims declined to 385,250 frm 386,750, the lowest average since July 2008. Also at 8:30 but somewhat disappointing Feb durable goods orders; expected to be up 1.1% were reported down 0.9%. Taking the volatile transportation orders away durables were expected to be up 1.8% but were down 0.6%. Companies may be tempering their purchases of new equipment until further signs emerge that the recovery is broadening. Shipments of non-defense capital goods excluding aircraft, used in calculating gross domestic product, increased 0.8% after falling 2.3% in January.
Prior to the two 8:30 reports treasuries and mortgages were trading slightly weaker, stock indexes were slightly better. There was little reaction in both markets to the data; at 9:00 the 10 yr -6/32 3.37% +2 bp and mortgage prices -4/32 (.12 bp). At 9:00 the DJIA +61, crude oil at $106.11 +$0.37, gold up $1.50. Overall quiet again this morning, markets settling a little after the big swings on Japan and Libya.
Yesterday a lot was made of Portugal's parliament rejecting the austerity plans put forth by Portugal's Prime Minister; as he said he would if parliament rejected his plan, he tendered his resignation. There was a lot of talk that Portugal would drag the euro currency down but so far that has not occurred. A bailout for Portugal may total as much as 70 billion euros ($99 billion), said two European officials with direct knowledge of the matter. The country will follow Greece and Ireland needing a bailout. We do not expect any significant market reactions to the issue as it was generally expected and debt issues in Europe are not new news.
In Libya progress is being made; more bombings of ground forces and military equipment after clearing the skies. French Defense Minister Gerard Longuet said the coalition has intercepted conversations among Libyan officers indicating that many are ready to abandon the regime. Comments coming from coalition forces that the intervention may lasts days or weeks, but not months.
Later today (11:00 am) Treasury will announce the amounts for next week's 2 yr, 5 yr and 7 yr note auctions; last month the total $99B is likely what we will see next week also.
At 9:30 the DJIA opened +56, the 10 yr -8/32 3.37% +2 bp and mortgage prices -5/32 (.15 bp). So far this morning markets have been orderly and likely will continue that way the rest of the day. We continue to expect interest rates to struggle at these levels but the rate markets take their marching orders from the equity markets. The stock indexes are now back to where they traded prior to the earthquakes and tsunami in Japan that shook the world and is still causing serious problems with their nuclear power plants not yet under control.
Wednesday, March 23, 2011
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, March 23, 2011
Treasuries and mortgages opened better this morning after a quiet day yesterday. The stock indexes early on were pointing to a slightly weaker open the reason for a little better trade in the bond and mortgage markets.
In Japan officials said city tap water may be unsafe for infants while Japan’s government sought to assure people that radiation levels detected in the food chain following a nuclear accident don’t pose a health threat. The Health Ministry earlier today advised against eating leafy vegetables, broccoli and cauliflower produced near the stricken Dai-Ichi power plant, located 220 kilometers (135 miles) from Tokyo. Radioactive iodine levels taken yesterday at a treatment facility in Katsushika ward were double the recommended limit for babies, a city official said in a televised briefing today. Some progress in containing one of the reactors but still no end to the concerns. The maximum reading reported so far at the site is 500 millisieverts per hour, meaning a worker in the vicinity would receive the maximum recommended lifetime dose in 30 minutes.
Investors are making moves in Japan; Monday Warren Buffett said he is making investments in Japan, today PIMCO is reported to be purchasing Toyota Motor Credit debt. Increasingly the outlook for the global economy is improving after the panic that ensued after the earthquakes and nuclear reactor problems in Japan were thought to bring the world economies down.
In Europe estimates for growth in Britain were lowered. U.K. government bonds stayed higher after Chancellor of the Exchequer George Osborne said growth this year will be 1.7%, lower than a previous forecast for a 2.1% expansion.
Earlier this morning the weekly MBA mortgage applications increased 2.7% from one week earlier. The Refinance Index increased 2.7% from the previous week. The seasonally adjusted Purchase Index increased 2.7% from one week earlier and was 15.3% lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is up 2.5%. The four week moving average is up 1.0% for the seasonally adjusted Purchase Index, while this average is up 3.3% for the Refinance Index. The refinance share of mortgage activity remained constant at 66.4% of total applications. The adjustable-rate mortgage (ARM) share of activity increased to 5.9% from 5.6% of total applications. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.80% from 4.79%, with points decreasing to 0.96 from 1.07 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.02% from 4.03%, with points increasing to 0.90 from 0.85 (including the origination fee) for 80% loans.
So far this morning markets are quiet with not much trading. After two weeks of very high market volatility time to sit back and evaluate what is actually occurring and the impact near and longer term.
The only data today; Feb new home sales at 10:00 were expected up 1.0%, another shocking number, down 16.9% to 250K units annualized. The median sales price $202,100.00 down 8.9% frm Feb last year; at the present sales pace there is a an 8.9 month supply. The decline to 250K annualized is the lowest since 1962 and the median sales price the lowest since Dec 2003. The initial reaction boosted mortgage prices as the 10 yr price gained, the equity markets were already lower but fell more on the very weak sales report On Monday Feb existing home sales fell 9.6%; both reports were way below what analysts had expected.
We have been talking about the outlook for US interest rates in the last couple of days; that in our view rates will begin to increase soon. As we noted it is a moving target based primarily on the economic outlook, kind of rattles that outlook a little when we see sales of homes, both existing and new, in Feb plunge much more deeply than what had been thought. The weakness in housing is nothing new but the magnitude of the Feb declines is worrisome to say the least. It might have been somewhat weather related as Feb was not good for most of the country, nevertheless the declines are shocking.
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, March 23, 2011
Treasuries and mortgages opened better this morning after a quiet day yesterday. The stock indexes early on were pointing to a slightly weaker open the reason for a little better trade in the bond and mortgage markets.
In Japan officials said city tap water may be unsafe for infants while Japan’s government sought to assure people that radiation levels detected in the food chain following a nuclear accident don’t pose a health threat. The Health Ministry earlier today advised against eating leafy vegetables, broccoli and cauliflower produced near the stricken Dai-Ichi power plant, located 220 kilometers (135 miles) from Tokyo. Radioactive iodine levels taken yesterday at a treatment facility in Katsushika ward were double the recommended limit for babies, a city official said in a televised briefing today. Some progress in containing one of the reactors but still no end to the concerns. The maximum reading reported so far at the site is 500 millisieverts per hour, meaning a worker in the vicinity would receive the maximum recommended lifetime dose in 30 minutes.
Investors are making moves in Japan; Monday Warren Buffett said he is making investments in Japan, today PIMCO is reported to be purchasing Toyota Motor Credit debt. Increasingly the outlook for the global economy is improving after the panic that ensued after the earthquakes and nuclear reactor problems in Japan were thought to bring the world economies down.
In Europe estimates for growth in Britain were lowered. U.K. government bonds stayed higher after Chancellor of the Exchequer George Osborne said growth this year will be 1.7%, lower than a previous forecast for a 2.1% expansion.
Earlier this morning the weekly MBA mortgage applications increased 2.7% from one week earlier. The Refinance Index increased 2.7% from the previous week. The seasonally adjusted Purchase Index increased 2.7% from one week earlier and was 15.3% lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is up 2.5%. The four week moving average is up 1.0% for the seasonally adjusted Purchase Index, while this average is up 3.3% for the Refinance Index. The refinance share of mortgage activity remained constant at 66.4% of total applications. The adjustable-rate mortgage (ARM) share of activity increased to 5.9% from 5.6% of total applications. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.80% from 4.79%, with points decreasing to 0.96 from 1.07 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.02% from 4.03%, with points increasing to 0.90 from 0.85 (including the origination fee) for 80% loans.
So far this morning markets are quiet with not much trading. After two weeks of very high market volatility time to sit back and evaluate what is actually occurring and the impact near and longer term.
The only data today; Feb new home sales at 10:00 were expected up 1.0%, another shocking number, down 16.9% to 250K units annualized. The median sales price $202,100.00 down 8.9% frm Feb last year; at the present sales pace there is a an 8.9 month supply. The decline to 250K annualized is the lowest since 1962 and the median sales price the lowest since Dec 2003. The initial reaction boosted mortgage prices as the 10 yr price gained, the equity markets were already lower but fell more on the very weak sales report On Monday Feb existing home sales fell 9.6%; both reports were way below what analysts had expected.
We have been talking about the outlook for US interest rates in the last couple of days; that in our view rates will begin to increase soon. As we noted it is a moving target based primarily on the economic outlook, kind of rattles that outlook a little when we see sales of homes, both existing and new, in Feb plunge much more deeply than what had been thought. The weakness in housing is nothing new but the magnitude of the Feb declines is worrisome to say the least. It might have been somewhat weather related as Feb was not good for most of the country, nevertheless the declines are shocking.
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, March 23, 2011
Treasuries and mortgages opened better this morning after a quiet day yesterday. The stock indexes early on were pointing to a slightly weaker open the reason for a little better trade in the bond and mortgage markets.
In Japan officials said city tap water may be unsafe for infants while Japan’s government sought to assure people that radiation levels detected in the food chain following a nuclear accident don’t pose a health threat. The Health Ministry earlier today advised against eating leafy vegetables, broccoli and cauliflower produced near the stricken Dai-Ichi power plant, located 220 kilometers (135 miles) from Tokyo. Radioactive iodine levels taken yesterday at a treatment facility in Katsushika ward were double the recommended limit for babies, a city official said in a televised briefing today. Some progress in containing one of the reactors but still no end to the concerns. The maximum reading reported so far at the site is 500 millisieverts per hour, meaning a worker in the vicinity would receive the maximum recommended lifetime dose in 30 minutes.
Investors are making moves in Japan; Monday Warren Buffett said he is making investments in Japan, today PIMCO is reported to be purchasing Toyota Motor Credit debt. Increasingly the outlook for the global economy is improving after the panic that ensued after the earthquakes and nuclear reactor problems in Japan were thought to bring the world economies down.
In Europe estimates for growth in Britain were lowered. U.K. government bonds stayed higher after Chancellor of the Exchequer George Osborne said growth this year will be 1.7%, lower than a previous forecast for a 2.1% expansion.
Earlier this morning the weekly MBA mortgage applications increased 2.7% from one week earlier. The Refinance Index increased 2.7% from the previous week. The seasonally adjusted Purchase Index increased 2.7% from one week earlier and was 15.3% lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is up 2.5%. The four week moving average is up 1.0% for the seasonally adjusted Purchase Index, while this average is up 3.3% for the Refinance Index. The refinance share of mortgage activity remained constant at 66.4% of total applications. The adjustable-rate mortgage (ARM) share of activity increased to 5.9% from 5.6% of total applications. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.80% from 4.79%, with points decreasing to 0.96 from 1.07 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.02% from 4.03%, with points increasing to 0.90 from 0.85 (including the origination fee) for 80% loans.
So far this morning markets are quiet with not much trading. After two weeks of very high market volatility time to sit back and evaluate what is actually occurring and the impact near and longer term.
The only data today; Feb new home sales at 10:00 were expected up 1.0%, another shocking number, down 16.9% to 250K units annualized. The median sales price $202,100.00 down 8.9% frm Feb last year; at the present sales pace there is a an 8.9 month supply. The decline to 250K annualized is the lowest since 1962 and the median sales price the lowest since Dec 2003. The initial reaction boosted mortgage prices as the 10 yr price gained, the equity markets were already lower but fell more on the very weak sales report On Monday Feb existing home sales fell 9.6%; both reports were way below what analysts had expected.
We have been talking about the outlook for US interest rates in the last couple of days; that in our view rates will begin to increase soon. As we noted it is a moving target based primarily on the economic outlook, kind of rattles that outlook a little when we see sales of homes, both existing and new, in Feb plunge much more deeply than what had been thought. The weakness in housing is nothing new but the magnitude of the Feb declines is worrisome to say the least. It might have been somewhat weather related as Feb was not good for most of the country, nevertheless the declines are shocking.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, March 23, 2011
Treasuries and mortgages opened better this morning after a quiet day yesterday. The stock indexes early on were pointing to a slightly weaker open the reason for a little better trade in the bond and mortgage markets.
In Japan officials said city tap water may be unsafe for infants while Japan’s government sought to assure people that radiation levels detected in the food chain following a nuclear accident don’t pose a health threat. The Health Ministry earlier today advised against eating leafy vegetables, broccoli and cauliflower produced near the stricken Dai-Ichi power plant, located 220 kilometers (135 miles) from Tokyo. Radioactive iodine levels taken yesterday at a treatment facility in Katsushika ward were double the recommended limit for babies, a city official said in a televised briefing today. Some progress in containing one of the reactors but still no end to the concerns. The maximum reading reported so far at the site is 500 millisieverts per hour, meaning a worker in the vicinity would receive the maximum recommended lifetime dose in 30 minutes.
Investors are making moves in Japan; Monday Warren Buffett said he is making investments in Japan, today PIMCO is reported to be purchasing Toyota Motor Credit debt. Increasingly the outlook for the global economy is improving after the panic that ensued after the earthquakes and nuclear reactor problems in Japan were thought to bring the world economies down.
In Europe estimates for growth in Britain were lowered. U.K. government bonds stayed higher after Chancellor of the Exchequer George Osborne said growth this year will be 1.7%, lower than a previous forecast for a 2.1% expansion.
Earlier this morning the weekly MBA mortgage applications increased 2.7% from one week earlier. The Refinance Index increased 2.7% from the previous week. The seasonally adjusted Purchase Index increased 2.7% from one week earlier and was 15.3% lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is up 2.5%. The four week moving average is up 1.0% for the seasonally adjusted Purchase Index, while this average is up 3.3% for the Refinance Index. The refinance share of mortgage activity remained constant at 66.4% of total applications. The adjustable-rate mortgage (ARM) share of activity increased to 5.9% from 5.6% of total applications. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.80% from 4.79%, with points decreasing to 0.96 from 1.07 (including the origination fee) for 80% loans. The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.02% from 4.03%, with points increasing to 0.90 from 0.85 (including the origination fee) for 80% loans.
So far this morning markets are quiet with not much trading. After two weeks of very high market volatility time to sit back and evaluate what is actually occurring and the impact near and longer term.
The only data today; Feb new home sales at 10:00 were expected up 1.0%, another shocking number, down 16.9% to 250K units annualized. The median sales price $202,100.00 down 8.9% frm Feb last year; at the present sales pace there is a an 8.9 month supply. The decline to 250K annualized is the lowest since 1962 and the median sales price the lowest since Dec 2003. The initial reaction boosted mortgage prices as the 10 yr price gained, the equity markets were already lower but fell more on the very weak sales report On Monday Feb existing home sales fell 9.6%; both reports were way below what analysts had expected.
We have been talking about the outlook for US interest rates in the last couple of days; that in our view rates will begin to increase soon. As we noted it is a moving target based primarily on the economic outlook, kind of rattles that outlook a little when we see sales of homes, both existing and new, in Feb plunge much more deeply than what had been thought. The weakness in housing is nothing new but the magnitude of the Feb declines is worrisome to say the least. It might have been somewhat weather related as Feb was not good for most of the country, nevertheless the declines are shocking.
Tuesday, March 22, 2011
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, March 22, 2011
The rate markets opened weaker today following selling yesterday. At 9:00 mortgage prices off 7/32 (.22 bp) frm the close yesterday, the 10 yr note -8/32 at 3.35% +2 bp. Not much new in the news from Libya and Japan; the coalition forces have bombed and missiled key cities in Libya trying to weaken Qaddafi forces (or is it Gadhafi, Gaddafi, Kaddafi, or Kaddafy). One US F 15 went down but not by fire, both pilots are safe. Aerial strikes enabled rebel forces to push out from their eastern stronghold of Benghazi. The countries involved in the attacks, Britain, France and the US are now debating who should lead the remainder of the intervention.
In Japan the reactors are still a problem but haven't worsened. The debate in markets has now shifted to how Japan will recover; there is an increasing but fragile view growing in markets that Japan is a buy in terms of equities. Japan will rebuild and recover according to huge investor Warren Buffett. Analysts from The Street are falling in line that the global economic impact won't be as serious as was thought at the onset of the earthquakes and tsunami. It isn't a slam dunk but with Buffett saying he is investing in the country the rest of the lemmings may fall in line and march to the same tune. Still very much a moving target however. The biggest hurdle we can see is electric power, Japan has lost a huge amount of power supply that won't be replaced quickly. Prime Minister Naoto Kan yesterday said there’s “light at the end of the tunnel” in the nation’s battle to avert a nuclear meltdown at a crippled power plant, which threatened a deeper shock to the nation’s consumers.
European Central Bank officials indicated the economic uncertainty caused by Japan’s earthquake may not deter them from raising interest rates next month. ECB President Jean-Claude Trichet told the European Parliament he has “nothing to add” to his March 3 remarks, when he said policy makers may raise the benchmark rate from a record low of 1.0% at their next meeting in April.
The stock market opened relatively unchanged ahead of 10:00 data on housing prices and regional manufacturing from the Richmond Fed.
At 10:00 FHFA reported Jan housing prices fell 0.3% frm Dec; Dec was revised from -0.3% to -1.0%. Yr/yr housing prices declined 3.9%.
Also at 10:00 the Richmond Fed manufacturing index; the index fell to 20 frm 25, the reaction cut the losses in treasuries in half and pushed stock indexes down.
Although so far today market volatility is subdued or a change, market volatility will continue to remain high. Not the kind of market environment that is conducive to taking risks unless one has a huge deep pocket. Sentiment changes rapidly on any news headline. We are most outwardly concerned about Japan and Libya but there is a lot to be concerned with especially in the overall Mideast region. Protests are increasing in many of the countries in the area; Syria, Yemen, Bahrain, Egypt, Tunisia, Turkey, and the list is growing. So far nothing serious is building but it is being closely monitored.
The outlook for US interest rates has not changed with Japan and Libya in the picture; interest rates in the US are going to head higher. Rates in China increasing, in India increasing, in Europe increasing; the Fed is close to being done with QE 2 buying $600B of treasuries, inflation fears are on the rise in most of the world while here it hasn't yet spread out of food and energy components it is only a matter of time before all prices begin to edge up. Not much inflation but with the 10 yr note at 3.35% and historically low there will be no hesitancy by investors dumping long term fixed income investments. It may be next month or six months but rates will increase.
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, March 22, 2011
The rate markets opened weaker today following selling yesterday. At 9:00 mortgage prices off 7/32 (.22 bp) frm the close yesterday, the 10 yr note -8/32 at 3.35% +2 bp. Not much new in the news from Libya and Japan; the coalition forces have bombed and missiled key cities in Libya trying to weaken Qaddafi forces (or is it Gadhafi, Gaddafi, Kaddafi, or Kaddafy). One US F 15 went down but not by fire, both pilots are safe. Aerial strikes enabled rebel forces to push out from their eastern stronghold of Benghazi. The countries involved in the attacks, Britain, France and the US are now debating who should lead the remainder of the intervention.
In Japan the reactors are still a problem but haven't worsened. The debate in markets has now shifted to how Japan will recover; there is an increasing but fragile view growing in markets that Japan is a buy in terms of equities. Japan will rebuild and recover according to huge investor Warren Buffett. Analysts from The Street are falling in line that the global economic impact won't be as serious as was thought at the onset of the earthquakes and tsunami. It isn't a slam dunk but with Buffett saying he is investing in the country the rest of the lemmings may fall in line and march to the same tune. Still very much a moving target however. The biggest hurdle we can see is electric power, Japan has lost a huge amount of power supply that won't be replaced quickly. Prime Minister Naoto Kan yesterday said there’s “light at the end of the tunnel” in the nation’s battle to avert a nuclear meltdown at a crippled power plant, which threatened a deeper shock to the nation’s consumers.
European Central Bank officials indicated the economic uncertainty caused by Japan’s earthquake may not deter them from raising interest rates next month. ECB President Jean-Claude Trichet told the European Parliament he has “nothing to add” to his March 3 remarks, when he said policy makers may raise the benchmark rate from a record low of 1.0% at their next meeting in April.
The stock market opened relatively unchanged ahead of 10:00 data on housing prices and regional manufacturing from the Richmond Fed.
At 10:00 FHFA reported Jan housing prices fell 0.3% frm Dec; Dec was revised from -0.3% to -1.0%. Yr/yr housing prices declined 3.9%.
Also at 10:00 the Richmond Fed manufacturing index; the index fell to 20 frm 25, the reaction cut the losses in treasuries in half and pushed stock indexes down.
Although so far today market volatility is subdued or a change, market volatility will continue to remain high. Not the kind of market environment that is conducive to taking risks unless one has a huge deep pocket. Sentiment changes rapidly on any news headline. We are most outwardly concerned about Japan and Libya but there is a lot to be concerned with especially in the overall Mideast region. Protests are increasing in many of the countries in the area; Syria, Yemen, Bahrain, Egypt, Tunisia, Turkey, and the list is growing. So far nothing serious is building but it is being closely monitored.
The outlook for US interest rates has not changed with Japan and Libya in the picture; interest rates in the US are going to head higher. Rates in China increasing, in India increasing, in Europe increasing; the Fed is close to being done with QE 2 buying $600B of treasuries, inflation fears are on the rise in most of the world while here it hasn't yet spread out of food and energy components it is only a matter of time before all prices begin to edge up. Not much inflation but with the 10 yr note at 3.35% and historically low there will be no hesitancy by investors dumping long term fixed income investments. It may be next month or six months but rates will increase.
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, March 22, 2011
The rate markets opened weaker today following selling yesterday. At 9:00 mortgage prices off 7/32 (.22 bp) frm the close yesterday, the 10 yr note -8/32 at 3.35% +2 bp. Not much new in the news from Libya and Japan; the coalition forces have bombed and missiled key cities in Libya trying to weaken Qaddafi forces (or is it Gadhafi, Gaddafi, Kaddafi, or Kaddafy). One US F 15 went down but not by fire, both pilots are safe. Aerial strikes enabled rebel forces to push out from their eastern stronghold of Benghazi. The countries involved in the attacks, Britain, France and the US are now debating who should lead the remainder of the intervention.
In Japan the reactors are still a problem but haven't worsened. The debate in markets has now shifted to how Japan will recover; there is an increasing but fragile view growing in markets that Japan is a buy in terms of equities. Japan will rebuild and recover according to huge investor Warren Buffett. Analysts from The Street are falling in line that the global economic impact won't be as serious as was thought at the onset of the earthquakes and tsunami. It isn't a slam dunk but with Buffett saying he is investing in the country the rest of the lemmings may fall in line and march to the same tune. Still very much a moving target however. The biggest hurdle we can see is electric power, Japan has lost a huge amount of power supply that won't be replaced quickly. Prime Minister Naoto Kan yesterday said there’s “light at the end of the tunnel” in the nation’s battle to avert a nuclear meltdown at a crippled power plant, which threatened a deeper shock to the nation’s consumers.
European Central Bank officials indicated the economic uncertainty caused by Japan’s earthquake may not deter them from raising interest rates next month. ECB President Jean-Claude Trichet told the European Parliament he has “nothing to add” to his March 3 remarks, when he said policy makers may raise the benchmark rate from a record low of 1.0% at their next meeting in April.
The stock market opened relatively unchanged ahead of 10:00 data on housing prices and regional manufacturing from the Richmond Fed.
At 10:00 FHFA reported Jan housing prices fell 0.3% frm Dec; Dec was revised from -0.3% to -1.0%. Yr/yr housing prices declined 3.9%.
Also at 10:00 the Richmond Fed manufacturing index; the index fell to 20 frm 25, the reaction cut the losses in treasuries in half and pushed stock indexes down.
Although so far today market volatility is subdued or a change, market volatility will continue to remain high. Not the kind of market environment that is conducive to taking risks unless one has a huge deep pocket. Sentiment changes rapidly on any news headline. We are most outwardly concerned about Japan and Libya but there is a lot to be concerned with especially in the overall Mideast region. Protests are increasing in many of the countries in the area; Syria, Yemen, Bahrain, Egypt, Tunisia, Turkey, and the list is growing. So far nothing serious is building but it is being closely monitored.
The outlook for US interest rates has not changed with Japan and Libya in the picture; interest rates in the US are going to head higher. Rates in China increasing, in India increasing, in Europe increasing; the Fed is close to being done with QE 2 buying $600B of treasuries, inflation fears are on the rise in most of the world while here it hasn't yet spread out of food and energy components it is only a matter of time before all prices begin to edge up. Not much inflation but with the 10 yr note at 3.35% and historically low there will be no hesitancy by investors dumping long term fixed income investments. It may be next month or six months but rates will increase.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, March 22, 2011
The rate markets opened weaker today following selling yesterday. At 9:00 mortgage prices off 7/32 (.22 bp) frm the close yesterday, the 10 yr note -8/32 at 3.35% +2 bp. Not much new in the news from Libya and Japan; the coalition forces have bombed and missiled key cities in Libya trying to weaken Qaddafi forces (or is it Gadhafi, Gaddafi, Kaddafi, or Kaddafy). One US F 15 went down but not by fire, both pilots are safe. Aerial strikes enabled rebel forces to push out from their eastern stronghold of Benghazi. The countries involved in the attacks, Britain, France and the US are now debating who should lead the remainder of the intervention.
In Japan the reactors are still a problem but haven't worsened. The debate in markets has now shifted to how Japan will recover; there is an increasing but fragile view growing in markets that Japan is a buy in terms of equities. Japan will rebuild and recover according to huge investor Warren Buffett. Analysts from The Street are falling in line that the global economic impact won't be as serious as was thought at the onset of the earthquakes and tsunami. It isn't a slam dunk but with Buffett saying he is investing in the country the rest of the lemmings may fall in line and march to the same tune. Still very much a moving target however. The biggest hurdle we can see is electric power, Japan has lost a huge amount of power supply that won't be replaced quickly. Prime Minister Naoto Kan yesterday said there’s “light at the end of the tunnel” in the nation’s battle to avert a nuclear meltdown at a crippled power plant, which threatened a deeper shock to the nation’s consumers.
European Central Bank officials indicated the economic uncertainty caused by Japan’s earthquake may not deter them from raising interest rates next month. ECB President Jean-Claude Trichet told the European Parliament he has “nothing to add” to his March 3 remarks, when he said policy makers may raise the benchmark rate from a record low of 1.0% at their next meeting in April.
The stock market opened relatively unchanged ahead of 10:00 data on housing prices and regional manufacturing from the Richmond Fed.
At 10:00 FHFA reported Jan housing prices fell 0.3% frm Dec; Dec was revised from -0.3% to -1.0%. Yr/yr housing prices declined 3.9%.
Also at 10:00 the Richmond Fed manufacturing index; the index fell to 20 frm 25, the reaction cut the losses in treasuries in half and pushed stock indexes down.
Although so far today market volatility is subdued or a change, market volatility will continue to remain high. Not the kind of market environment that is conducive to taking risks unless one has a huge deep pocket. Sentiment changes rapidly on any news headline. We are most outwardly concerned about Japan and Libya but there is a lot to be concerned with especially in the overall Mideast region. Protests are increasing in many of the countries in the area; Syria, Yemen, Bahrain, Egypt, Tunisia, Turkey, and the list is growing. So far nothing serious is building but it is being closely monitored.
The outlook for US interest rates has not changed with Japan and Libya in the picture; interest rates in the US are going to head higher. Rates in China increasing, in India increasing, in Europe increasing; the Fed is close to being done with QE 2 buying $600B of treasuries, inflation fears are on the rise in most of the world while here it hasn't yet spread out of food and energy components it is only a matter of time before all prices begin to edge up. Not much inflation but with the 10 yr note at 3.35% and historically low there will be no hesitancy by investors dumping long term fixed income investments. It may be next month or six months but rates will increase.
Monday, March 21, 2011
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Monday, March 21, 2011
Treasuries and mortgages opened weaker this morning. The stock indexes prior to the open were trading higher. Same story, if equities are better the rate markets will be softer. I Japan a couple of reactors are said to be closer to being controlled but now another reactor that had been stable is spewing out steam filled with radiation. In Libya the UN forces bombed Qaddafi forces over the weekend helping rebels but so far Qaddafi remains defiant and reports that he is taking citizens a human shields into his compound keeping UN forces from taking him out. Crude and gold are higher today on the Libyan situation.
European stocks rallied as Japan’s nuke crisis eased and American officials said its allies are in full control of Libya’s airspace following two days of airstrikes. U.S. index futures and Asian shares advanced. US stocks opening stronger on the same thinking, lemmings running again. No one actually knows a lot of detail about Japan's nuke problems, the government in Japan has never been completely forthcoming on problematic situations but at the moment it appears markets are relaxing a bit after panic equity selling erased all of the gains earned this year based on the S&P 500 index.
Oil is higher today on the Libyan and Mideast situations. Oil traders believe that Libya and the continual roiling in Mideast countries will lower supplies. Speculation in the oil markets isn't new, it has however reached another high water mark. Libyan output has fallen to less than 400,000 barrels a day; the country produced 1.59 million barrels a day in January, according to estimates. Libyan oil production halted by the country’s civil war is likely to remain suspended for the rest of this year according to some analysts. In the Mideast Bahrain’s government declared a three-month state of emergency on March 15 after troops from Saudi Arabia and other Arab Gulf states arrived to support the administration in quelling more than a month of protests. Yemen’s President Ali Abdullah Saleh fired his cabinet yesterday after the deadliest crackdown in two months of unrest led officials close to him to resign in protest. At least 46 people were killed and hundreds injured earlier this week as police and pro-regime gunmen shot at protesters in the capital.
The Fed announced that it will sell its $142B MBS portfolio it acquired in the financial meltdown from AIG. It intends to sell $10B a month as long as market conditions can handle it. The Fed believes it will make a profit on the sales.
At 9:30 the DJIA opened +150; the 10 yr note at 9:29 was -10/32, at 9:33 -19/32. Mortgage prices at 9:29 -4/32, at 9:33 -9/32 (.28 bp).
The only data today; at 10:00 Feb existing home sales expected down 4.5% down 9.6% to 4.88 mil frm 5.40 mil in Jan, Jan sales were revised up to +3.4% frm +2.7%. The median sales price $156,100.00 the lowest since Apr 2002 and -5.2% frm Feb 2010; there is an 8.6 month supply at present dales rate an increase of 3.5%. 39% of sales in Feb were distressed properties the highest since Apr 2009. Not a good report but it didn't phase the stock indexes, the DJIA actually improved after the report.
This week's Economic Calendar:
Tuesday;
10:00 am FHFA housing price index (N/A)
Wednesday;
7:00 am Weekly MBA mortgage applications (N/A)
10:00 am Feb new home sales (+1.0%)
Thursday;
8:30 am weekly jobless claims (-1K to 384K; continuing claims 3.70 mil frm 3.706 mil)
Feb durable goods orders (+1.1%; ex transportation +1.8%)
Friday;
8:30 Final Q4 GDP (+2.9% frm 2.8% on the prelim last month)
9:55 am U. of Michigan consumer sentiment index (68.0 frm 68.2 at mid-month)
Economic data always is critical but now with the Japanese, Mideast and Libya issues traders are focusing more on those issues in terms of near term trading.
Lenders that set morning prices prior to 9:30 this morning are already contemplating re-pricing lower. Mortgages and treasures continue to decline as the stock market works higher.
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Monday, March 21, 2011
Treasuries and mortgages opened weaker this morning. The stock indexes prior to the open were trading higher. Same story, if equities are better the rate markets will be softer. I Japan a couple of reactors are said to be closer to being controlled but now another reactor that had been stable is spewing out steam filled with radiation. In Libya the UN forces bombed Qaddafi forces over the weekend helping rebels but so far Qaddafi remains defiant and reports that he is taking citizens a human shields into his compound keeping UN forces from taking him out. Crude and gold are higher today on the Libyan situation.
European stocks rallied as Japan’s nuke crisis eased and American officials said its allies are in full control of Libya’s airspace following two days of airstrikes. U.S. index futures and Asian shares advanced. US stocks opening stronger on the same thinking, lemmings running again. No one actually knows a lot of detail about Japan's nuke problems, the government in Japan has never been completely forthcoming on problematic situations but at the moment it appears markets are relaxing a bit after panic equity selling erased all of the gains earned this year based on the S&P 500 index.
Oil is higher today on the Libyan and Mideast situations. Oil traders believe that Libya and the continual roiling in Mideast countries will lower supplies. Speculation in the oil markets isn't new, it has however reached another high water mark. Libyan output has fallen to less than 400,000 barrels a day; the country produced 1.59 million barrels a day in January, according to estimates. Libyan oil production halted by the country’s civil war is likely to remain suspended for the rest of this year according to some analysts. In the Mideast Bahrain’s government declared a three-month state of emergency on March 15 after troops from Saudi Arabia and other Arab Gulf states arrived to support the administration in quelling more than a month of protests. Yemen’s President Ali Abdullah Saleh fired his cabinet yesterday after the deadliest crackdown in two months of unrest led officials close to him to resign in protest. At least 46 people were killed and hundreds injured earlier this week as police and pro-regime gunmen shot at protesters in the capital.
The Fed announced that it will sell its $142B MBS portfolio it acquired in the financial meltdown from AIG. It intends to sell $10B a month as long as market conditions can handle it. The Fed believes it will make a profit on the sales.
At 9:30 the DJIA opened +150; the 10 yr note at 9:29 was -10/32, at 9:33 -19/32. Mortgage prices at 9:29 -4/32, at 9:33 -9/32 (.28 bp).
The only data today; at 10:00 Feb existing home sales expected down 4.5% down 9.6% to 4.88 mil frm 5.40 mil in Jan, Jan sales were revised up to +3.4% frm +2.7%. The median sales price $156,100.00 the lowest since Apr 2002 and -5.2% frm Feb 2010; there is an 8.6 month supply at present dales rate an increase of 3.5%. 39% of sales in Feb were distressed properties the highest since Apr 2009. Not a good report but it didn't phase the stock indexes, the DJIA actually improved after the report.
This week's Economic Calendar:
Tuesday;
10:00 am FHFA housing price index (N/A)
Wednesday;
7:00 am Weekly MBA mortgage applications (N/A)
10:00 am Feb new home sales (+1.0%)
Thursday;
8:30 am weekly jobless claims (-1K to 384K; continuing claims 3.70 mil frm 3.706 mil)
Feb durable goods orders (+1.1%; ex transportation +1.8%)
Friday;
8:30 Final Q4 GDP (+2.9% frm 2.8% on the prelim last month)
9:55 am U. of Michigan consumer sentiment index (68.0 frm 68.2 at mid-month)
Economic data always is critical but now with the Japanese, Mideast and Libya issues traders are focusing more on those issues in terms of near term trading.
Lenders that set morning prices prior to 9:30 this morning are already contemplating re-pricing lower. Mortgages and treasures continue to decline as the stock market works higher.
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Monday, March 21, 2011
Treasuries and mortgages opened weaker this morning. The stock indexes prior to the open were trading higher. Same story, if equities are better the rate markets will be softer. I Japan a couple of reactors are said to be closer to being controlled but now another reactor that had been stable is spewing out steam filled with radiation. In Libya the UN forces bombed Qaddafi forces over the weekend helping rebels but so far Qaddafi remains defiant and reports that he is taking citizens a human shields into his compound keeping UN forces from taking him out. Crude and gold are higher today on the Libyan situation.
European stocks rallied as Japan’s nuke crisis eased and American officials said its allies are in full control of Libya’s airspace following two days of airstrikes. U.S. index futures and Asian shares advanced. US stocks opening stronger on the same thinking, lemmings running again. No one actually knows a lot of detail about Japan's nuke problems, the government in Japan has never been completely forthcoming on problematic situations but at the moment it appears markets are relaxing a bit after panic equity selling erased all of the gains earned this year based on the S&P 500 index.
Oil is higher today on the Libyan and Mideast situations. Oil traders believe that Libya and the continual roiling in Mideast countries will lower supplies. Speculation in the oil markets isn't new, it has however reached another high water mark. Libyan output has fallen to less than 400,000 barrels a day; the country produced 1.59 million barrels a day in January, according to estimates. Libyan oil production halted by the country’s civil war is likely to remain suspended for the rest of this year according to some analysts. In the Mideast Bahrain’s government declared a three-month state of emergency on March 15 after troops from Saudi Arabia and other Arab Gulf states arrived to support the administration in quelling more than a month of protests. Yemen’s President Ali Abdullah Saleh fired his cabinet yesterday after the deadliest crackdown in two months of unrest led officials close to him to resign in protest. At least 46 people were killed and hundreds injured earlier this week as police and pro-regime gunmen shot at protesters in the capital.
The Fed announced that it will sell its $142B MBS portfolio it acquired in the financial meltdown from AIG. It intends to sell $10B a month as long as market conditions can handle it. The Fed believes it will make a profit on the sales.
At 9:30 the DJIA opened +150; the 10 yr note at 9:29 was -10/32, at 9:33 -19/32. Mortgage prices at 9:29 -4/32, at 9:33 -9/32 (.28 bp).
The only data today; at 10:00 Feb existing home sales expected down 4.5% down 9.6% to 4.88 mil frm 5.40 mil in Jan, Jan sales were revised up to +3.4% frm +2.7%. The median sales price $156,100.00 the lowest since Apr 2002 and -5.2% frm Feb 2010; there is an 8.6 month supply at present dales rate an increase of 3.5%. 39% of sales in Feb were distressed properties the highest since Apr 2009. Not a good report but it didn't phase the stock indexes, the DJIA actually improved after the report.
This week's Economic Calendar:
Tuesday;
10:00 am FHFA housing price index (N/A)
Wednesday;
7:00 am Weekly MBA mortgage applications (N/A)
10:00 am Feb new home sales (+1.0%)
Thursday;
8:30 am weekly jobless claims (-1K to 384K; continuing claims 3.70 mil frm 3.706 mil)
Feb durable goods orders (+1.1%; ex transportation +1.8%)
Friday;
8:30 Final Q4 GDP (+2.9% frm 2.8% on the prelim last month)
9:55 am U. of Michigan consumer sentiment index (68.0 frm 68.2 at mid-month)
Economic data always is critical but now with the Japanese, Mideast and Libya issues traders are focusing more on those issues in terms of near term trading.
Lenders that set morning prices prior to 9:30 this morning are already contemplating re-pricing lower. Mortgages and treasures continue to decline as the stock market works higher.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Monday, March 21, 2011
Treasuries and mortgages opened weaker this morning. The stock indexes prior to the open were trading higher. Same story, if equities are better the rate markets will be softer. I Japan a couple of reactors are said to be closer to being controlled but now another reactor that had been stable is spewing out steam filled with radiation. In Libya the UN forces bombed Qaddafi forces over the weekend helping rebels but so far Qaddafi remains defiant and reports that he is taking citizens a human shields into his compound keeping UN forces from taking him out. Crude and gold are higher today on the Libyan situation.
European stocks rallied as Japan’s nuke crisis eased and American officials said its allies are in full control of Libya’s airspace following two days of airstrikes. U.S. index futures and Asian shares advanced. US stocks opening stronger on the same thinking, lemmings running again. No one actually knows a lot of detail about Japan's nuke problems, the government in Japan has never been completely forthcoming on problematic situations but at the moment it appears markets are relaxing a bit after panic equity selling erased all of the gains earned this year based on the S&P 500 index.
Oil is higher today on the Libyan and Mideast situations. Oil traders believe that Libya and the continual roiling in Mideast countries will lower supplies. Speculation in the oil markets isn't new, it has however reached another high water mark. Libyan output has fallen to less than 400,000 barrels a day; the country produced 1.59 million barrels a day in January, according to estimates. Libyan oil production halted by the country’s civil war is likely to remain suspended for the rest of this year according to some analysts. In the Mideast Bahrain’s government declared a three-month state of emergency on March 15 after troops from Saudi Arabia and other Arab Gulf states arrived to support the administration in quelling more than a month of protests. Yemen’s President Ali Abdullah Saleh fired his cabinet yesterday after the deadliest crackdown in two months of unrest led officials close to him to resign in protest. At least 46 people were killed and hundreds injured earlier this week as police and pro-regime gunmen shot at protesters in the capital.
The Fed announced that it will sell its $142B MBS portfolio it acquired in the financial meltdown from AIG. It intends to sell $10B a month as long as market conditions can handle it. The Fed believes it will make a profit on the sales.
At 9:30 the DJIA opened +150; the 10 yr note at 9:29 was -10/32, at 9:33 -19/32. Mortgage prices at 9:29 -4/32, at 9:33 -9/32 (.28 bp).
The only data today; at 10:00 Feb existing home sales expected down 4.5% down 9.6% to 4.88 mil frm 5.40 mil in Jan, Jan sales were revised up to +3.4% frm +2.7%. The median sales price $156,100.00 the lowest since Apr 2002 and -5.2% frm Feb 2010; there is an 8.6 month supply at present dales rate an increase of 3.5%. 39% of sales in Feb were distressed properties the highest since Apr 2009. Not a good report but it didn't phase the stock indexes, the DJIA actually improved after the report.
This week's Economic Calendar:
Tuesday;
10:00 am FHFA housing price index (N/A)
Wednesday;
7:00 am Weekly MBA mortgage applications (N/A)
10:00 am Feb new home sales (+1.0%)
Thursday;
8:30 am weekly jobless claims (-1K to 384K; continuing claims 3.70 mil frm 3.706 mil)
Feb durable goods orders (+1.1%; ex transportation +1.8%)
Friday;
8:30 Final Q4 GDP (+2.9% frm 2.8% on the prelim last month)
9:55 am U. of Michigan consumer sentiment index (68.0 frm 68.2 at mid-month)
Economic data always is critical but now with the Japanese, Mideast and Libya issues traders are focusing more on those issues in terms of near term trading.
Lenders that set morning prices prior to 9:30 this morning are already contemplating re-pricing lower. Mortgages and treasures continue to decline as the stock market works higher.
Saturday, March 19, 2011
Friday, March 18, 2011
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Friday, March 18, 2011
Treasuries and mortgages started flat very early this morning but prices fell at 8:45 when the foreign minister of Libya announced Libya will halt all military operations, probably due to the UN vote last night for instituting a no-fly zone over the country. When the headline scrolled the DJIA index jumped to +130 and the 10 yr note which was off 5/32 dropped an additional 8/32 taking the 10 yr yield up to 3.31%. Whether his comments will be taken seriously we will wait and see but it did move markets initially.
The G-7 countries early last night approved currency intervention to stop the increase in the yen, the first time in 11 yrs that there is a coordinated move by central banks to intervene in currency markets. The result has been a big decline in the yen versus most currencies including the dollar. The intervention has a target for the yen but the G-7 countries will not say what it is. Back n the 80s there were a number of times central banks intervened in currency markets, each time the interventions were short-lived and generally didn't have the intended affect.
In Japan work continues to keep the cooling tanks from over-heating. The power company saying it now has laid the power lines and hopes to have power to one of the reactors tomorrow and the others possibly by Sunday. Expects however are saying there is no assurance that when power is connected that the cooling pumps will work. No reports of additional radiation leaks overnight. News that there has been poor management and maintenance in the Japan nuclear power system for years starts the finger pointing even before the present crisis is stabilized.
There are no economic reports to deal with today, yesterday the Mar Philadelphia Fed business data was stronger than forecasts. While there was no noticeable reaction to it with other issues overriding, markets won't ignore it. The US economy still holds optimism but there is anecdotal evidence consumers may be less optimistic than in Dec when the measurements of confidence and sentiment were increasing. Higher energy and food costs are working into consumer concerns. In the UK consumer sentiment is falling on concerns about jobs and economic recovery. An index of sentiment dropped 10 points to 38, the lowest since records began in 2004.
Crude oil was higher early this morning but is now lower on the announcement of a cease fire in Libya. Gold stronger on the intervention on the yen as currency market volatility will increase over the next few weeks.
At 9:30 the DJIA opened +130, mortgage prices -7/32 (.22 bp) and the 10 yr note yield at 3.33% +7 bp. All markets re-tracing the panic movements seen early this week and last.
Week-ends are always something of an issue for traders with two days away; this weekend is even more so with Japan's problems well documented and now the Libyan situation with the UN initiating a no-flay zone over the country and then early this morning the announcement from Libya officials that they would implement a cease fire. Crude oil was up about $2.50 prior to the 8:30 announcement of the cease fire, now down $0.30, the stock market rallied and the bond market sold off on less safety concerns. Will we come out of the weekend in tact? No additional radiation leaks n Japan and the cease fire holding? Tough and risky to be in markets these days with the high levels of volatility.
We don't expect much of a rally in stocks and not much selling in bond markets today with the weekend and all the uncertainty still hanging over the markets.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Friday, March 18, 2011
Treasuries and mortgages started flat very early this morning but prices fell at 8:45 when the foreign minister of Libya announced Libya will halt all military operations, probably due to the UN vote last night for instituting a no-fly zone over the country. When the headline scrolled the DJIA index jumped to +130 and the 10 yr note which was off 5/32 dropped an additional 8/32 taking the 10 yr yield up to 3.31%. Whether his comments will be taken seriously we will wait and see but it did move markets initially.
The G-7 countries early last night approved currency intervention to stop the increase in the yen, the first time in 11 yrs that there is a coordinated move by central banks to intervene in currency markets. The result has been a big decline in the yen versus most currencies including the dollar. The intervention has a target for the yen but the G-7 countries will not say what it is. Back n the 80s there were a number of times central banks intervened in currency markets, each time the interventions were short-lived and generally didn't have the intended affect.
In Japan work continues to keep the cooling tanks from over-heating. The power company saying it now has laid the power lines and hopes to have power to one of the reactors tomorrow and the others possibly by Sunday. Expects however are saying there is no assurance that when power is connected that the cooling pumps will work. No reports of additional radiation leaks overnight. News that there has been poor management and maintenance in the Japan nuclear power system for years starts the finger pointing even before the present crisis is stabilized.
There are no economic reports to deal with today, yesterday the Mar Philadelphia Fed business data was stronger than forecasts. While there was no noticeable reaction to it with other issues overriding, markets won't ignore it. The US economy still holds optimism but there is anecdotal evidence consumers may be less optimistic than in Dec when the measurements of confidence and sentiment were increasing. Higher energy and food costs are working into consumer concerns. In the UK consumer sentiment is falling on concerns about jobs and economic recovery. An index of sentiment dropped 10 points to 38, the lowest since records began in 2004.
Crude oil was higher early this morning but is now lower on the announcement of a cease fire in Libya. Gold stronger on the intervention on the yen as currency market volatility will increase over the next few weeks.
At 9:30 the DJIA opened +130, mortgage prices -7/32 (.22 bp) and the 10 yr note yield at 3.33% +7 bp. All markets re-tracing the panic movements seen early this week and last.
Week-ends are always something of an issue for traders with two days away; this weekend is even more so with Japan's problems well documented and now the Libyan situation with the UN initiating a no-flay zone over the country and then early this morning the announcement from Libya officials that they would implement a cease fire. Crude oil was up about $2.50 prior to the 8:30 announcement of the cease fire, now down $0.30, the stock market rallied and the bond market sold off on less safety concerns. Will we come out of the weekend in tact? No additional radiation leaks n Japan and the cease fire holding? Tough and risky to be in markets these days with the high levels of volatility.
We don't expect much of a rally in stocks and not much selling in bond markets today with the weekend and all the uncertainty still hanging over the markets.
Wednesday, March 16, 2011
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, March 16, 2011
Treasuries and mortgages opened flat this morning as did the stock indexes, but by 9:00 treasuries and mortgages doing slightly better and stock index futures lower on economic data at 8:30 and still a lot of uncertainty about Japan's problems and its eventual impact on global economies. Crude oil has traded down for the past few days, this morning crude is up over $1.50 at 9:00, gold is also up about $10.00 after heavy selling over the past few sessions. At 9:30 the DJIA opened -50, 30 yr mtgs +8/32 (.25 bp) and the 10 yr note +11/32 to 3.26%.
The Tokyo stock market improved overnight, up 6.5% after huge selling recently. The problems at the nuclear reactors in Japan are still a major concern. The number of deaths in the country is still undetermined, the impact on Japan's economy is still unquantified and its implications to other economies is unknown. Lot of discussions and opinions but nothing of substance that markets can get its arms around. It is going to weeks and maybe months to assess the longer term consequences from the tragedy; in the meantime US markets will likely continue with high degree of volatility. Another earthquake over night; 6.0 magnitude. Reports that many are leaving Tokyo continue to increase.
At 8:30 Feb housing starts were expected to be down about 4.0%; starts were down 22.5% as reported, the lowest start level since Mar 1984. Building permits were expected up 2.0%, they fell 8.2%. Jan starts were revised higher, to +18.4% frm +14.6%. Recent data on home construction has been extremely volatile as the data this morning clearly shows.
Feb producer price index was reported at 8:30; overall PPI jumped a huge 1.6%, more strong evidence that food and energy are going to impact consumer spending. When food and energy prices are left out PPI was up 0.2%. Yr/yr overall PPI +5.6% and ex food and energy +1.8%. The Fed, and therefore markets, still ignore what has always been very volatile food and energy prices when calculating inflation so its all good in the eyes of the Fed and the markets. The problem with that is that food and energy are no longer that volatile, both just continue to increase. At some point, and we don't have any idea when, markets will have to deal with it as consumer spending will be impacted and in turn will be a drag on economic growth. How much of drag and when it will begin to show up in the data we don't want to speculate.
Its Wednesday so we get the MBA weekly mortgage applications. The Market Composite Index, a measure of mortgage loan application volume, decreased 0.7% on a seasonally adjusted basis from one week earlier. The Refinance Index increased 0.9% from the previous week and is the highest Refinance Index recorded in the survey since December 2010. The seasonally adjusted Purchase Index decreased 4.0% from one week earlier. The four week moving average for the seasonally adjusted Market Index is up 4.9%. The four week moving average is up 1.6% for the seasonally adjusted Purchase Index, while this average is up 6.6% for the Refinance Index. The refinance share of mortgage activity increased to 66.4% of total applications from 65.5% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.6% from 6.0% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.79% from 4.93%, with points increasing to 1.07 from 0.87 (including the origination fee) for 80% loans. This is the lowest contract 30-year rate observed in the survey since the week ending January 14, 2011.The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.03% from 4.17%, with points decreasing to 0.85 from 1.15 (including the origination fee) for 80% loans. This is the lowest contract 15-year interest rate observed in the survey since the week ending December 3, 2010.
Inflation in Europe continues to increase; inflation accelerated to the fastest in more than two years in February, increasing pressure on the European Central Bank to raise interest rates. Inflation in the 17-nation euro region quickened to 2.4% from 2.3% in January. A week ago the ECB warned it may have to increase its base rate as inflation increases. Inflation is the fastest since October 2008 and exceeded the ECB’s 2 percent limit for a third month. Something to watch but at the moment all focus remains on Japan and safety moves into US treasuries continuing to push rates lower.
Treasuries and mortgages continue to improve with increased intraday volatility; the stock market is leading, yesterday the DJIA started down almost 300 points but ended -137 as it climbed out of its hole treasury and mortgage markets lost ground. Market volatility today remains high and must be monitored closely; we will and let you know if price worsening develops as it did yesterday.
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, March 16, 2011
Treasuries and mortgages opened flat this morning as did the stock indexes, but by 9:00 treasuries and mortgages doing slightly better and stock index futures lower on economic data at 8:30 and still a lot of uncertainty about Japan's problems and its eventual impact on global economies. Crude oil has traded down for the past few days, this morning crude is up over $1.50 at 9:00, gold is also up about $10.00 after heavy selling over the past few sessions. At 9:30 the DJIA opened -50, 30 yr mtgs +8/32 (.25 bp) and the 10 yr note +11/32 to 3.26%.
The Tokyo stock market improved overnight, up 6.5% after huge selling recently. The problems at the nuclear reactors in Japan are still a major concern. The number of deaths in the country is still undetermined, the impact on Japan's economy is still unquantified and its implications to other economies is unknown. Lot of discussions and opinions but nothing of substance that markets can get its arms around. It is going to weeks and maybe months to assess the longer term consequences from the tragedy; in the meantime US markets will likely continue with high degree of volatility. Another earthquake over night; 6.0 magnitude. Reports that many are leaving Tokyo continue to increase.
At 8:30 Feb housing starts were expected to be down about 4.0%; starts were down 22.5% as reported, the lowest start level since Mar 1984. Building permits were expected up 2.0%, they fell 8.2%. Jan starts were revised higher, to +18.4% frm +14.6%. Recent data on home construction has been extremely volatile as the data this morning clearly shows.
Feb producer price index was reported at 8:30; overall PPI jumped a huge 1.6%, more strong evidence that food and energy are going to impact consumer spending. When food and energy prices are left out PPI was up 0.2%. Yr/yr overall PPI +5.6% and ex food and energy +1.8%. The Fed, and therefore markets, still ignore what has always been very volatile food and energy prices when calculating inflation so its all good in the eyes of the Fed and the markets. The problem with that is that food and energy are no longer that volatile, both just continue to increase. At some point, and we don't have any idea when, markets will have to deal with it as consumer spending will be impacted and in turn will be a drag on economic growth. How much of drag and when it will begin to show up in the data we don't want to speculate.
Its Wednesday so we get the MBA weekly mortgage applications. The Market Composite Index, a measure of mortgage loan application volume, decreased 0.7% on a seasonally adjusted basis from one week earlier. The Refinance Index increased 0.9% from the previous week and is the highest Refinance Index recorded in the survey since December 2010. The seasonally adjusted Purchase Index decreased 4.0% from one week earlier. The four week moving average for the seasonally adjusted Market Index is up 4.9%. The four week moving average is up 1.6% for the seasonally adjusted Purchase Index, while this average is up 6.6% for the Refinance Index. The refinance share of mortgage activity increased to 66.4% of total applications from 65.5% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.6% from 6.0% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.79% from 4.93%, with points increasing to 1.07 from 0.87 (including the origination fee) for 80% loans. This is the lowest contract 30-year rate observed in the survey since the week ending January 14, 2011.The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.03% from 4.17%, with points decreasing to 0.85 from 1.15 (including the origination fee) for 80% loans. This is the lowest contract 15-year interest rate observed in the survey since the week ending December 3, 2010.
Inflation in Europe continues to increase; inflation accelerated to the fastest in more than two years in February, increasing pressure on the European Central Bank to raise interest rates. Inflation in the 17-nation euro region quickened to 2.4% from 2.3% in January. A week ago the ECB warned it may have to increase its base rate as inflation increases. Inflation is the fastest since October 2008 and exceeded the ECB’s 2 percent limit for a third month. Something to watch but at the moment all focus remains on Japan and safety moves into US treasuries continuing to push rates lower.
Treasuries and mortgages continue to improve with increased intraday volatility; the stock market is leading, yesterday the DJIA started down almost 300 points but ended -137 as it climbed out of its hole treasury and mortgage markets lost ground. Market volatility today remains high and must be monitored closely; we will and let you know if price worsening develops as it did yesterday.
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, March 16, 2011
Treasuries and mortgages opened flat this morning as did the stock indexes, but by 9:00 treasuries and mortgages doing slightly better and stock index futures lower on economic data at 8:30 and still a lot of uncertainty about Japan's problems and its eventual impact on global economies. Crude oil has traded down for the past few days, this morning crude is up over $1.50 at 9:00, gold is also up about $10.00 after heavy selling over the past few sessions. At 9:30 the DJIA opened -50, 30 yr mtgs +8/32 (.25 bp) and the 10 yr note +11/32 to 3.26%.
The Tokyo stock market improved overnight, up 6.5% after huge selling recently. The problems at the nuclear reactors in Japan are still a major concern. The number of deaths in the country is still undetermined, the impact on Japan's economy is still unquantified and its implications to other economies is unknown. Lot of discussions and opinions but nothing of substance that markets can get its arms around. It is going to weeks and maybe months to assess the longer term consequences from the tragedy; in the meantime US markets will likely continue with high degree of volatility. Another earthquake over night; 6.0 magnitude. Reports that many are leaving Tokyo continue to increase.
At 8:30 Feb housing starts were expected to be down about 4.0%; starts were down 22.5% as reported, the lowest start level since Mar 1984. Building permits were expected up 2.0%, they fell 8.2%. Jan starts were revised higher, to +18.4% frm +14.6%. Recent data on home construction has been extremely volatile as the data this morning clearly shows.
Feb producer price index was reported at 8:30; overall PPI jumped a huge 1.6%, more strong evidence that food and energy are going to impact consumer spending. When food and energy prices are left out PPI was up 0.2%. Yr/yr overall PPI +5.6% and ex food and energy +1.8%. The Fed, and therefore markets, still ignore what has always been very volatile food and energy prices when calculating inflation so its all good in the eyes of the Fed and the markets. The problem with that is that food and energy are no longer that volatile, both just continue to increase. At some point, and we don't have any idea when, markets will have to deal with it as consumer spending will be impacted and in turn will be a drag on economic growth. How much of drag and when it will begin to show up in the data we don't want to speculate.
Its Wednesday so we get the MBA weekly mortgage applications. The Market Composite Index, a measure of mortgage loan application volume, decreased 0.7% on a seasonally adjusted basis from one week earlier. The Refinance Index increased 0.9% from the previous week and is the highest Refinance Index recorded in the survey since December 2010. The seasonally adjusted Purchase Index decreased 4.0% from one week earlier. The four week moving average for the seasonally adjusted Market Index is up 4.9%. The four week moving average is up 1.6% for the seasonally adjusted Purchase Index, while this average is up 6.6% for the Refinance Index. The refinance share of mortgage activity increased to 66.4% of total applications from 65.5% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.6% from 6.0% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.79% from 4.93%, with points increasing to 1.07 from 0.87 (including the origination fee) for 80% loans. This is the lowest contract 30-year rate observed in the survey since the week ending January 14, 2011.The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.03% from 4.17%, with points decreasing to 0.85 from 1.15 (including the origination fee) for 80% loans. This is the lowest contract 15-year interest rate observed in the survey since the week ending December 3, 2010.
Inflation in Europe continues to increase; inflation accelerated to the fastest in more than two years in February, increasing pressure on the European Central Bank to raise interest rates. Inflation in the 17-nation euro region quickened to 2.4% from 2.3% in January. A week ago the ECB warned it may have to increase its base rate as inflation increases. Inflation is the fastest since October 2008 and exceeded the ECB’s 2 percent limit for a third month. Something to watch but at the moment all focus remains on Japan and safety moves into US treasuries continuing to push rates lower.
Treasuries and mortgages continue to improve with increased intraday volatility; the stock market is leading, yesterday the DJIA started down almost 300 points but ended -137 as it climbed out of its hole treasury and mortgage markets lost ground. Market volatility today remains high and must be monitored closely; we will and let you know if price worsening develops as it did yesterday.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, March 16, 2011
Treasuries and mortgages opened flat this morning as did the stock indexes, but by 9:00 treasuries and mortgages doing slightly better and stock index futures lower on economic data at 8:30 and still a lot of uncertainty about Japan's problems and its eventual impact on global economies. Crude oil has traded down for the past few days, this morning crude is up over $1.50 at 9:00, gold is also up about $10.00 after heavy selling over the past few sessions. At 9:30 the DJIA opened -50, 30 yr mtgs +8/32 (.25 bp) and the 10 yr note +11/32 to 3.26%.
The Tokyo stock market improved overnight, up 6.5% after huge selling recently. The problems at the nuclear reactors in Japan are still a major concern. The number of deaths in the country is still undetermined, the impact on Japan's economy is still unquantified and its implications to other economies is unknown. Lot of discussions and opinions but nothing of substance that markets can get its arms around. It is going to weeks and maybe months to assess the longer term consequences from the tragedy; in the meantime US markets will likely continue with high degree of volatility. Another earthquake over night; 6.0 magnitude. Reports that many are leaving Tokyo continue to increase.
At 8:30 Feb housing starts were expected to be down about 4.0%; starts were down 22.5% as reported, the lowest start level since Mar 1984. Building permits were expected up 2.0%, they fell 8.2%. Jan starts were revised higher, to +18.4% frm +14.6%. Recent data on home construction has been extremely volatile as the data this morning clearly shows.
Feb producer price index was reported at 8:30; overall PPI jumped a huge 1.6%, more strong evidence that food and energy are going to impact consumer spending. When food and energy prices are left out PPI was up 0.2%. Yr/yr overall PPI +5.6% and ex food and energy +1.8%. The Fed, and therefore markets, still ignore what has always been very volatile food and energy prices when calculating inflation so its all good in the eyes of the Fed and the markets. The problem with that is that food and energy are no longer that volatile, both just continue to increase. At some point, and we don't have any idea when, markets will have to deal with it as consumer spending will be impacted and in turn will be a drag on economic growth. How much of drag and when it will begin to show up in the data we don't want to speculate.
Its Wednesday so we get the MBA weekly mortgage applications. The Market Composite Index, a measure of mortgage loan application volume, decreased 0.7% on a seasonally adjusted basis from one week earlier. The Refinance Index increased 0.9% from the previous week and is the highest Refinance Index recorded in the survey since December 2010. The seasonally adjusted Purchase Index decreased 4.0% from one week earlier. The four week moving average for the seasonally adjusted Market Index is up 4.9%. The four week moving average is up 1.6% for the seasonally adjusted Purchase Index, while this average is up 6.6% for the Refinance Index. The refinance share of mortgage activity increased to 66.4% of total applications from 65.5% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.6% from 6.0% of total applications from the previous week. The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.79% from 4.93%, with points increasing to 1.07 from 0.87 (including the origination fee) for 80% loans. This is the lowest contract 30-year rate observed in the survey since the week ending January 14, 2011.The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.03% from 4.17%, with points decreasing to 0.85 from 1.15 (including the origination fee) for 80% loans. This is the lowest contract 15-year interest rate observed in the survey since the week ending December 3, 2010.
Inflation in Europe continues to increase; inflation accelerated to the fastest in more than two years in February, increasing pressure on the European Central Bank to raise interest rates. Inflation in the 17-nation euro region quickened to 2.4% from 2.3% in January. A week ago the ECB warned it may have to increase its base rate as inflation increases. Inflation is the fastest since October 2008 and exceeded the ECB’s 2 percent limit for a third month. Something to watch but at the moment all focus remains on Japan and safety moves into US treasuries continuing to push rates lower.
Treasuries and mortgages continue to improve with increased intraday volatility; the stock market is leading, yesterday the DJIA started down almost 300 points but ended -137 as it climbed out of its hole treasury and mortgage markets lost ground. Market volatility today remains high and must be monitored closely; we will and let you know if price worsening develops as it did yesterday.
Tuesday, March 15, 2011
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, March 15, 2011
The potential of a nuke meltdown increased overnight sending all investors running to cash. The Tokyo stock market with the Nikkei 225 (NKY) index posting its biggest two-day drop since 1987, while commodities slid and Treasuries jumped. Europe's equity markets all lower, in the US in pre-market trade at 8:30 had the DJIA down 278, crude oil down $3.85 and gold off $30.00. Conflicting reports that are steaming moment to moment out of Japan; earlier last night the Prime Minister was cautioning that a meltdown was increasing quickly, asking people to leave the area, tape up windows and/or stay inside. At 8:30 this morning Tokyo Electric Power Co. engineers at a nuclear plant restored water to safe levels, helping drive down radiation after residents within 30 kilometers (19 miles) were ordered inside to avoid contamination. “The radiation levels are above normal, but at most only about one-10th of a chest X-ray and are not harmful to the health,” the government said in a separate statement today.
Whether or not there will be a serious meltdown is an obvious concern but markets are beginning to realize that Japan's economy will be impaired for years in the process of re-building. The impact of one of the largest economies in the world being dragged down is still not fully understood by markets or the Fed. The Fed is meeting today in the scheduled FOMC meeting, talk already about the potential of another easing move resulting from the crisis. The Bank of Japan infused $183B into the financial system yesterday and another $83B today to support the system.
Yesterday the US markets appeared to have not taken the Japanese situation as seriously as we would have thought; the DJIA fell just 51 points while the Treasuries and mortgages hardly moved. Today with increased fears of a nuclear meltdown all markets are being impacted. Crude oil continues to fall on the idea that Japan's need for oil will decline as its economy grinds to almost a halt. Longer term however, crude will eventually increase as markets realize Japan won't have nuclear power for years to come. Gold also is declining, no one wants to hold anything but cash now; all commodities are lower this morning. The news out of Japan is conflicting, there is little understanding now as to the eventual impact for the global economies; today it is a run to cover many market positions.
More not so good news; German investor confidence unexpectedly fell for the first time in five months in March. Its confidence index of investor and analyst expectations, which aims to predict developments six months in advance, declined to 14.1 from 15.7 in February. Economists had expected a gain to 15.9.
The troubles in the Mideast have been put in the back seat with Japan now the main focus; nevertheless things are not improving in the region. Troops from the Gulf Cooperation Council, including Saudi Arabia, crossed into Bahrain yesterday, the first cross-border intervention since a wave of popular uprisings swept through parts of the Arab world. Shiite protesters and Bahraini forces escalated Sunday, with more than 100 people injured as demonstrators demanded democracy through elections from their Sunni monarch.
Economic news here in the US this morning has been pushed to the side; the Mar NY Empire State manufacturing data this morning at 8:30 showed the overall index up to 17.5 frm 15.43, a little better than expected but with Japan it is already out-dated news. The sub components; new orders fell to an index read of 5.81 frm 11.80 in Feb, the employment component increased to 9.09 frm 3.61 and prices pd for materials increased to 53.25 from 45.78 (any index read over zero is considered expansion.
At 10:00 the Mar NAHB housing market index hit at 17, up 1 point from the past five months and was as expected.
Later this afternoon the FOMC meeting will conclude with the usual short policy statement. The Fed is unlikely to have much comment in the statement regarding the current economic crisis that is escalating out of Japan. Expect a lot of debate in the coming days over whether or not the Fed may have to initiate another easing move of some kind. It is too soon for any definitive decisions, the Fed will wait for more news and analysis on the impact on the US economy before committing to any additional easing.
Everything happening now in the world is supportive to US treasuries and therefore mortgage markets. Early this morning the 10 yr note yield fell to 3.23% down from 3.37% at the close yesterday. By 9:30 the 10 yr rate had increased to 3.26%. The equity markets are trading lower today with investors and traders scrambling to market neutral positions or simply selling. Yesterday the equity market opened soft with the DJIA off 140 points but by the end of the session the DJIA ended down just 51 points; today may be a lot different pending continual news coming out of Japan on their nuke problem. This morning the DJIA opened down 185, the 10 yr +30/32 at 3.26% -11 bp and mortgage prices up 19/32 (.59 bp); within five minutes of the open the DJIA traded down 293 on a news flash Japan suffered another 6.0 earthquake.
It is all happening rapidly this morning, no one wants to wait to see facts, the markets are highly volatile and emotional at the beginning of the day. Today may be exceptionally volatile as the news unfolds. Already in the first 30 minutes of trading in equities the indexes are well off their lows and the bond and mortgage markets have backed off their best levels so far.
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, March 15, 2011
The potential of a nuke meltdown increased overnight sending all investors running to cash. The Tokyo stock market with the Nikkei 225 (NKY) index posting its biggest two-day drop since 1987, while commodities slid and Treasuries jumped. Europe's equity markets all lower, in the US in pre-market trade at 8:30 had the DJIA down 278, crude oil down $3.85 and gold off $30.00. Conflicting reports that are steaming moment to moment out of Japan; earlier last night the Prime Minister was cautioning that a meltdown was increasing quickly, asking people to leave the area, tape up windows and/or stay inside. At 8:30 this morning Tokyo Electric Power Co. engineers at a nuclear plant restored water to safe levels, helping drive down radiation after residents within 30 kilometers (19 miles) were ordered inside to avoid contamination. “The radiation levels are above normal, but at most only about one-10th of a chest X-ray and are not harmful to the health,” the government said in a separate statement today.
Whether or not there will be a serious meltdown is an obvious concern but markets are beginning to realize that Japan's economy will be impaired for years in the process of re-building. The impact of one of the largest economies in the world being dragged down is still not fully understood by markets or the Fed. The Fed is meeting today in the scheduled FOMC meeting, talk already about the potential of another easing move resulting from the crisis. The Bank of Japan infused $183B into the financial system yesterday and another $83B today to support the system.
Yesterday the US markets appeared to have not taken the Japanese situation as seriously as we would have thought; the DJIA fell just 51 points while the Treasuries and mortgages hardly moved. Today with increased fears of a nuclear meltdown all markets are being impacted. Crude oil continues to fall on the idea that Japan's need for oil will decline as its economy grinds to almost a halt. Longer term however, crude will eventually increase as markets realize Japan won't have nuclear power for years to come. Gold also is declining, no one wants to hold anything but cash now; all commodities are lower this morning. The news out of Japan is conflicting, there is little understanding now as to the eventual impact for the global economies; today it is a run to cover many market positions.
More not so good news; German investor confidence unexpectedly fell for the first time in five months in March. Its confidence index of investor and analyst expectations, which aims to predict developments six months in advance, declined to 14.1 from 15.7 in February. Economists had expected a gain to 15.9.
The troubles in the Mideast have been put in the back seat with Japan now the main focus; nevertheless things are not improving in the region. Troops from the Gulf Cooperation Council, including Saudi Arabia, crossed into Bahrain yesterday, the first cross-border intervention since a wave of popular uprisings swept through parts of the Arab world. Shiite protesters and Bahraini forces escalated Sunday, with more than 100 people injured as demonstrators demanded democracy through elections from their Sunni monarch.
Economic news here in the US this morning has been pushed to the side; the Mar NY Empire State manufacturing data this morning at 8:30 showed the overall index up to 17.5 frm 15.43, a little better than expected but with Japan it is already out-dated news. The sub components; new orders fell to an index read of 5.81 frm 11.80 in Feb, the employment component increased to 9.09 frm 3.61 and prices pd for materials increased to 53.25 from 45.78 (any index read over zero is considered expansion.
At 10:00 the Mar NAHB housing market index hit at 17, up 1 point from the past five months and was as expected.
Later this afternoon the FOMC meeting will conclude with the usual short policy statement. The Fed is unlikely to have much comment in the statement regarding the current economic crisis that is escalating out of Japan. Expect a lot of debate in the coming days over whether or not the Fed may have to initiate another easing move of some kind. It is too soon for any definitive decisions, the Fed will wait for more news and analysis on the impact on the US economy before committing to any additional easing.
Everything happening now in the world is supportive to US treasuries and therefore mortgage markets. Early this morning the 10 yr note yield fell to 3.23% down from 3.37% at the close yesterday. By 9:30 the 10 yr rate had increased to 3.26%. The equity markets are trading lower today with investors and traders scrambling to market neutral positions or simply selling. Yesterday the equity market opened soft with the DJIA off 140 points but by the end of the session the DJIA ended down just 51 points; today may be a lot different pending continual news coming out of Japan on their nuke problem. This morning the DJIA opened down 185, the 10 yr +30/32 at 3.26% -11 bp and mortgage prices up 19/32 (.59 bp); within five minutes of the open the DJIA traded down 293 on a news flash Japan suffered another 6.0 earthquake.
It is all happening rapidly this morning, no one wants to wait to see facts, the markets are highly volatile and emotional at the beginning of the day. Today may be exceptionally volatile as the news unfolds. Already in the first 30 minutes of trading in equities the indexes are well off their lows and the bond and mortgage markets have backed off their best levels so far.
Mortgage Rates
Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, March 15, 2011
The potential of a nuke meltdown increased overnight sending all investors running to cash. The Tokyo stock market with the Nikkei 225 (NKY) index posting its biggest two-day drop since 1987, while commodities slid and Treasuries jumped. Europe's equity markets all lower, in the US in pre-market trade at 8:30 had the DJIA down 278, crude oil down $3.85 and gold off $30.00. Conflicting reports that are steaming moment to moment out of Japan; earlier last night the Prime Minister was cautioning that a meltdown was increasing quickly, asking people to leave the area, tape up windows and/or stay inside. At 8:30 this morning Tokyo Electric Power Co. engineers at a nuclear plant restored water to safe levels, helping drive down radiation after residents within 30 kilometers (19 miles) were ordered inside to avoid contamination. “The radiation levels are above normal, but at most only about one-10th of a chest X-ray and are not harmful to the health,” the government said in a separate statement today.
Whether or not there will be a serious meltdown is an obvious concern but markets are beginning to realize that Japan's economy will be impaired for years in the process of re-building. The impact of one of the largest economies in the world being dragged down is still not fully understood by markets or the Fed. The Fed is meeting today in the scheduled FOMC meeting, talk already about the potential of another easing move resulting from the crisis. The Bank of Japan infused $183B into the financial system yesterday and another $83B today to support the system.
Yesterday the US markets appeared to have not taken the Japanese situation as seriously as we would have thought; the DJIA fell just 51 points while the Treasuries and mortgages hardly moved. Today with increased fears of a nuclear meltdown all markets are being impacted. Crude oil continues to fall on the idea that Japan's need for oil will decline as its economy grinds to almost a halt. Longer term however, crude will eventually increase as markets realize Japan won't have nuclear power for years to come. Gold also is declining, no one wants to hold anything but cash now; all commodities are lower this morning. The news out of Japan is conflicting, there is little understanding now as to the eventual impact for the global economies; today it is a run to cover many market positions.
More not so good news; German investor confidence unexpectedly fell for the first time in five months in March. Its confidence index of investor and analyst expectations, which aims to predict developments six months in advance, declined to 14.1 from 15.7 in February. Economists had expected a gain to 15.9.
The troubles in the Mideast have been put in the back seat with Japan now the main focus; nevertheless things are not improving in the region. Troops from the Gulf Cooperation Council, including Saudi Arabia, crossed into Bahrain yesterday, the first cross-border intervention since a wave of popular uprisings swept through parts of the Arab world. Shiite protesters and Bahraini forces escalated Sunday, with more than 100 people injured as demonstrators demanded democracy through elections from their Sunni monarch.
Economic news here in the US this morning has been pushed to the side; the Mar NY Empire State manufacturing data this morning at 8:30 showed the overall index up to 17.5 frm 15.43, a little better than expected but with Japan it is already out-dated news. The sub components; new orders fell to an index read of 5.81 frm 11.80 in Feb, the employment component increased to 9.09 frm 3.61 and prices pd for materials increased to 53.25 from 45.78 (any index read over zero is considered expansion.
At 10:00 the Mar NAHB housing market index hit at 17, up 1 point from the past five months and was as expected.
Later this afternoon the FOMC meeting will conclude with the usual short policy statement. The Fed is unlikely to have much comment in the statement regarding the current economic crisis that is escalating out of Japan. Expect a lot of debate in the coming days over whether or not the Fed may have to initiate another easing move of some kind. It is too soon for any definitive decisions, the Fed will wait for more news and analysis on the impact on the US economy before committing to any additional easing.
Everything happening now in the world is supportive to US treasuries and therefore mortgage markets. Early this morning the 10 yr note yield fell to 3.23% down from 3.37% at the close yesterday. By 9:30 the 10 yr rate had increased to 3.26%. The equity markets are trading lower today with investors and traders scrambling to market neutral positions or simply selling. Yesterday the equity market opened soft with the DJIA off 140 points but by the end of the session the DJIA ended down just 51 points; today may be a lot different pending continual news coming out of Japan on their nuke problem. This morning the DJIA opened down 185, the 10 yr +30/32 at 3.26% -11 bp and mortgage prices up 19/32 (.59 bp); within five minutes of the open the DJIA traded down 293 on a news flash Japan suffered another 6.0 earthquake.
It is all happening rapidly this morning, no one wants to wait to see facts, the markets are highly volatile and emotional at the beginning of the day. Today may be exceptionally volatile as the news unfolds. Already in the first 30 minutes of trading in equities the indexes are well off their lows and the bond and mortgage markets have backed off their best levels so far.
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: http://www.equityinvestmentcapital.com/
Building Strong, Lasting Relationships; One Client at a Time.
Tuesday, March 15, 2011
The potential of a nuke meltdown increased overnight sending all investors running to cash. The Tokyo stock market with the Nikkei 225 (NKY) index posting its biggest two-day drop since 1987, while commodities slid and Treasuries jumped. Europe's equity markets all lower, in the US in pre-market trade at 8:30 had the DJIA down 278, crude oil down $3.85 and gold off $30.00. Conflicting reports that are steaming moment to moment out of Japan; earlier last night the Prime Minister was cautioning that a meltdown was increasing quickly, asking people to leave the area, tape up windows and/or stay inside. At 8:30 this morning Tokyo Electric Power Co. engineers at a nuclear plant restored water to safe levels, helping drive down radiation after residents within 30 kilometers (19 miles) were ordered inside to avoid contamination. “The radiation levels are above normal, but at most only about one-10th of a chest X-ray and are not harmful to the health,” the government said in a separate statement today.
Whether or not there will be a serious meltdown is an obvious concern but markets are beginning to realize that Japan's economy will be impaired for years in the process of re-building. The impact of one of the largest economies in the world being dragged down is still not fully understood by markets or the Fed. The Fed is meeting today in the scheduled FOMC meeting, talk already about the potential of another easing move resulting from the crisis. The Bank of Japan infused $183B into the financial system yesterday and another $83B today to support the system.
Yesterday the US markets appeared to have not taken the Japanese situation as seriously as we would have thought; the DJIA fell just 51 points while the Treasuries and mortgages hardly moved. Today with increased fears of a nuclear meltdown all markets are being impacted. Crude oil continues to fall on the idea that Japan's need for oil will decline as its economy grinds to almost a halt. Longer term however, crude will eventually increase as markets realize Japan won't have nuclear power for years to come. Gold also is declining, no one wants to hold anything but cash now; all commodities are lower this morning. The news out of Japan is conflicting, there is little understanding now as to the eventual impact for the global economies; today it is a run to cover many market positions.
More not so good news; German investor confidence unexpectedly fell for the first time in five months in March. Its confidence index of investor and analyst expectations, which aims to predict developments six months in advance, declined to 14.1 from 15.7 in February. Economists had expected a gain to 15.9.
The troubles in the Mideast have been put in the back seat with Japan now the main focus; nevertheless things are not improving in the region. Troops from the Gulf Cooperation Council, including Saudi Arabia, crossed into Bahrain yesterday, the first cross-border intervention since a wave of popular uprisings swept through parts of the Arab world. Shiite protesters and Bahraini forces escalated Sunday, with more than 100 people injured as demonstrators demanded democracy through elections from their Sunni monarch.
Economic news here in the US this morning has been pushed to the side; the Mar NY Empire State manufacturing data this morning at 8:30 showed the overall index up to 17.5 frm 15.43, a little better than expected but with Japan it is already out-dated news. The sub components; new orders fell to an index read of 5.81 frm 11.80 in Feb, the employment component increased to 9.09 frm 3.61 and prices pd for materials increased to 53.25 from 45.78 (any index read over zero is considered expansion.
At 10:00 the Mar NAHB housing market index hit at 17, up 1 point from the past five months and was as expected.
Later this afternoon the FOMC meeting will conclude with the usual short policy statement. The Fed is unlikely to have much comment in the statement regarding the current economic crisis that is escalating out of Japan. Expect a lot of debate in the coming days over whether or not the Fed may have to initiate another easing move of some kind. It is too soon for any definitive decisions, the Fed will wait for more news and analysis on the impact on the US economy before committing to any additional easing.
Everything happening now in the world is supportive to US treasuries and therefore mortgage markets. Early this morning the 10 yr note yield fell to 3.23% down from 3.37% at the close yesterday. By 9:30 the 10 yr rate had increased to 3.26%. The equity markets are trading lower today with investors and traders scrambling to market neutral positions or simply selling. Yesterday the equity market opened soft with the DJIA off 140 points but by the end of the session the DJIA ended down just 51 points; today may be a lot different pending continual news coming out of Japan on their nuke problem. This morning the DJIA opened down 185, the 10 yr +30/32 at 3.26% -11 bp and mortgage prices up 19/32 (.59 bp); within five minutes of the open the DJIA traded down 293 on a news flash Japan suffered another 6.0 earthquake.
It is all happening rapidly this morning, no one wants to wait to see facts, the markets are highly volatile and emotional at the beginning of the day. Today may be exceptionally volatile as the news unfolds. Already in the first 30 minutes of trading in equities the indexes are well off their lows and the bond and mortgage markets have backed off their best levels so far.
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