HOLIDAY REMINDER
On Monday, September 5, 2011, in observance of
Labor Day!
On Friday September 2, 2011
Our office will be open regular hours.
Have a safe and happy holiday!
Thank you for your continued business and support.
Wednesday, August 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.
Wednesday, August 31, 2011
At 8:15 the August ADP private jobs report showed an increase of 91K; markets were generally expecting an increase of 100K, in the world of jobs it is considered right on estimates given the revisions that will come later. The stock market trade remained with gains while the treasury and mortgage markets also held slight price gains after yesterday's strong rate market rally. Over the previous six reports, ADP’s initial figure was closest to the Labor Department’s first estimate of private payrolls in February, when it understated the gain in jobs by 5,000. The estimate was least accurate in June, when it overestimated the increase in employment by 100,000.
The weekly MBA applications out at 7:00; the overall index declined 9.6%. Refinancing applications fell 12.2% in the August 26 week according to MBA. The purchase index ended three weeks of heavy decline though with only a mild 0.9% gain. Rates are near 10-month lows, at 4.32% for 30-year lows for a seven basis point decline in the week. Points for 30-year loans increased to 1.30 from 0.88 (including origination fee) for 80% loans.
At 9:30 the DJIA opened up 53 points, the 10 yr note dipped back from its best levels (+9/32) to +4/32 at 2.17%. Mortgage prices at 9:15 were +8/32 (.25 bp) at 9:30 +3/32 (.09 bp).
At 9:45 the August Chicago purchasing mgrs index, expected at 54 frm 58.8, it was better at 56.5. The components; new orders index fell to 56.9 frm 59.4 in July, prices pd index fell to 68.6 frm 71.7 and employment increased a little to 52.1 frm 51.5. On the initial reaction toe 10 yr fell to -1/32 on the day with its rate at 2.18%, earlier this morning the rate was at 2.14%; mortgage prices held their prices at 9:30 (+.09 bp).
At 10:00 July factory orders; expectations were for an increase of 2.0%, as released orders increased 2.4%; June revised from -0.8% to -0.4%. Ex transportation orders up 0.9%. A better report along with a better Chicago report added to the gains in stock markets and pushed rate market prices lower.
The rate markets are continuing to move in a range, the 10 yr note still looking good but at present levels and uncertainty about what the President will announce in his speech next week the bond and mortgage markets will likely continue to trade in a narrow range. The Fed is also in play; yesterday's FOMC minutes revealed a Fed divided on what to do, if anything. Bernanke says the Fed has many tools in its box to use if necessary. What does that mean? The division at the FOMC on what to do is the most since back in 2002 when Greenspan was in charge. There is no consensus at the Fed and certainly no consensus in the markets. Bernanke wants to jam rates so low that it will force banks to lend and drive investors into stocks, all n an effort to induce consumers to spend more. The problem is, consumers are more wise than the Fed and markets give them credit for; savings rate is at 5.0% after negative savings prior to 2008. As long as job creation remains weak and home prices continue to decline consumers will not increase spending.
Mortgage Rate Update
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, August 31, 2011
At 8:15 the August ADP private jobs report showed an increase of 91K; markets were generally expecting an increase of 100K, in the world of jobs it is considered right on estimates given the revisions that will come later. The stock market trade remained with gains while the treasury and mortgage markets also held slight price gains after yesterday's strong rate market rally. Over the previous six reports, ADP’s initial figure was closest to the Labor Department’s first estimate of private payrolls in February, when it understated the gain in jobs by 5,000. The estimate was least accurate in June, when it overestimated the increase in employment by 100,000.
The weekly MBA applications out at 7:00; the overall index declined 9.6%. Refinancing applications fell 12.2% in the August 26 week according to MBA. The purchase index ended three weeks of heavy decline though with only a mild 0.9% gain. Rates are near 10-month lows, at 4.32% for 30-year lows for a seven basis point decline in the week. Points for 30-year loans increased to 1.30 from 0.88 (including origination fee) for 80% loans.
At 9:30 the DJIA opened up 53 points, the 10 yr note dipped back from its best levels (+9/32) to +4/32 at 2.17%. Mortgage prices at 9:15 were +8/32 (.25 bp) at 9:30 +3/32 (.09 bp).
At 9:45 the August Chicago purchasing mgrs index, expected at 54 frm 58.8, it was better at 56.5. The components; new orders index fell to 56.9 frm 59.4 in July, prices pd index fell to 68.6 frm 71.7 and employment increased a little to 52.1 frm 51.5. On the initial reaction toe 10 yr fell to -1/32 on the day with its rate at 2.18%, earlier this morning the rate was at 2.14%; mortgage prices held their prices at 9:30 (+.09 bp).
At 10:00 July factory orders; expectations were for an increase of 2.0%, as released orders increased 2.4%; June revised from -0.8% to -0.4%. Ex transportation orders up 0.9%. A better report along with a better Chicago report added to the gains in stock markets and pushed rate market prices lower.
The rate markets are continuing to move in a range, the 10 yr note still looking good but at present levels and uncertainty about what the President will announce in his speech next week the bond and mortgage markets will likely continue to trade in a narrow range. The Fed is also in play; yesterday's FOMC minutes revealed a Fed divided on what to do, if anything. Bernanke says the Fed has many tools in its box to use if necessary. What does that mean? The division at the FOMC on what to do is the most since back in 2002 when Greenspan was in charge. There is no consensus at the Fed and certainly no consensus in the markets. Bernanke wants to jam rates so low that it will force banks to lend and drive investors into stocks, all n an effort to induce consumers to spend more. The problem is, consumers are more wise than the Fed and markets give them credit for; savings rate is at 5.0% after negative savings prior to 2008. As long as job creation remains weak and home prices continue to decline consumers will not increase spending.
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, August 31, 2011
At 8:15 the August ADP private jobs report showed an increase of 91K; markets were generally expecting an increase of 100K, in the world of jobs it is considered right on estimates given the revisions that will come later. The stock market trade remained with gains while the treasury and mortgage markets also held slight price gains after yesterday's strong rate market rally. Over the previous six reports, ADP’s initial figure was closest to the Labor Department’s first estimate of private payrolls in February, when it understated the gain in jobs by 5,000. The estimate was least accurate in June, when it overestimated the increase in employment by 100,000.
The weekly MBA applications out at 7:00; the overall index declined 9.6%. Refinancing applications fell 12.2% in the August 26 week according to MBA. The purchase index ended three weeks of heavy decline though with only a mild 0.9% gain. Rates are near 10-month lows, at 4.32% for 30-year lows for a seven basis point decline in the week. Points for 30-year loans increased to 1.30 from 0.88 (including origination fee) for 80% loans.
At 9:30 the DJIA opened up 53 points, the 10 yr note dipped back from its best levels (+9/32) to +4/32 at 2.17%. Mortgage prices at 9:15 were +8/32 (.25 bp) at 9:30 +3/32 (.09 bp).
At 9:45 the August Chicago purchasing mgrs index, expected at 54 frm 58.8, it was better at 56.5. The components; new orders index fell to 56.9 frm 59.4 in July, prices pd index fell to 68.6 frm 71.7 and employment increased a little to 52.1 frm 51.5. On the initial reaction toe 10 yr fell to -1/32 on the day with its rate at 2.18%, earlier this morning the rate was at 2.14%; mortgage prices held their prices at 9:30 (+.09 bp).
At 10:00 July factory orders; expectations were for an increase of 2.0%, as released orders increased 2.4%; June revised from -0.8% to -0.4%. Ex transportation orders up 0.9%. A better report along with a better Chicago report added to the gains in stock markets and pushed rate market prices lower.
The rate markets are continuing to move in a range, the 10 yr note still looking good but at present levels and uncertainty about what the President will announce in his speech next week the bond and mortgage markets will likely continue to trade in a narrow range. The Fed is also in play; yesterday's FOMC minutes revealed a Fed divided on what to do, if anything. Bernanke says the Fed has many tools in its box to use if necessary. What does that mean? The division at the FOMC on what to do is the most since back in 2002 when Greenspan was in charge. There is no consensus at the Fed and certainly no consensus in the markets. Bernanke wants to jam rates so low that it will force banks to lend and drive investors into stocks, all n an effort to induce consumers to spend more. The problem is, consumers are more wise than the Fed and markets give them credit for; savings rate is at 5.0% after negative savings prior to 2008. As long as job creation remains weak and home prices continue to decline consumers will not increase spending.
Tuesday, August 30, 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, August 30, 2011
A better open this morning in the bond and mortgage markets; the stock indexes pointing to a lower open. Two days of stock market rallies generally leads to a day of decline as investors are still unwilling to jump in heavily. On the bond and mortgage markets, the rate markets are likely to continue their sideway movement until at least Friday when the August employment report is released. The MBS market continues to be volatile with price changes as much as 7/32 a click at times; this morning 30 yr MBSs traded +11/32 (.34 bp), in one trade the price fell 7/32 (.22 bp).
Charles Evans, Chicago Fed President, on CNBC this morning suggesting the Fed should be doing much more; he mentioned the Fed should increase its inflation target to 3.0% in an effort to reflate prices, he suggests he would like to see more stimulus, he wants the Fed to set a target for low rates possibly tied to employment like until the unemployment rate falls to 7.5% as an example. He isn't one in the camp that believes there will be no double dip; another Fed voice and another opinion. At 2:00 this afternoon the Fed will release the minutes of the FOMC meeting on 8/9 wherein there was a lot of dissention within the members debating the economic outlook and led up to the famous "the Fed will leave rates at these levels until mid-2013". The minutes should be interesting, if not market moving. Evans does not believe the Fed's low rates has inflated commodity prices; on that comment gold jumped $40.00.
June Case/Shiller home price index at 9:00 am; Q2 overall +3.6%; in June up 1.1%. It covers 20 cities, a lot of data that essentially doesn't have much new news in it. The index of property values in 20 cities fell 4.5% from June 2010, after a 4.6% drop in the 12 months ended May that was the biggest since 2009.
At 9:30 the DJIA opened -50; mortgage prices that were +11/32 at 9:00 fell back to +4/32 at 9:30. The 10 yr note up 19/32 at 9:30 at 2.20% -6 bp. MBSs are looking weaker than what we expect, low volume and the Case/Shiller data this morning might be a drag. Prior to 9:30 the stock indexes were trading much weaker than at the actual open.
At 10:00 August consumer confidence; expected at 52.0 frm 59.5, fell to 44.5; the expectations index fell to 51.9 frm 74.9 and the jobs-hard-to-get index at 49.1 frm 44.8 in July. The reaction was swift; the 10 yr note jumped to +27/32 to 2.17%, mortgage prices no change on the data; the DJIA down 107. Just prior to the release the DJIA -27, the 10 yr note +23/32 and mortgage prices up 10/32 (.31 bp)
Bonds and mortgages are likely to continue sideway movement until Friday's employment data. After employment its the President and his next major speech on the 5th of Sept where he will reveal what plans he has to boost the economy, the housing markets and employment.
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, August 30, 2011
A better open this morning in the bond and mortgage markets; the stock indexes pointing to a lower open. Two days of stock market rallies generally leads to a day of decline as investors are still unwilling to jump in heavily. On the bond and mortgage markets, the rate markets are likely to continue their sideway movement until at least Friday when the August employment report is released. The MBS market continues to be volatile with price changes as much as 7/32 a click at times; this morning 30 yr MBSs traded +11/32 (.34 bp), in one trade the price fell 7/32 (.22 bp).
Charles Evans, Chicago Fed President, on CNBC this morning suggesting the Fed should be doing much more; he mentioned the Fed should increase its inflation target to 3.0% in an effort to reflate prices, he suggests he would like to see more stimulus, he wants the Fed to set a target for low rates possibly tied to employment like until the unemployment rate falls to 7.5% as an example. He isn't one in the camp that believes there will be no double dip; another Fed voice and another opinion. At 2:00 this afternoon the Fed will release the minutes of the FOMC meeting on 8/9 wherein there was a lot of dissention within the members debating the economic outlook and led up to the famous "the Fed will leave rates at these levels until mid-2013". The minutes should be interesting, if not market moving. Evans does not believe the Fed's low rates has inflated commodity prices; on that comment gold jumped $40.00.
June Case/Shiller home price index at 9:00 am; Q2 overall +3.6%; in June up 1.1%. It covers 20 cities, a lot of data that essentially doesn't have much new news in it. The index of property values in 20 cities fell 4.5% from June 2010, after a 4.6% drop in the 12 months ended May that was the biggest since 2009.
At 9:30 the DJIA opened -50; mortgage prices that were +11/32 at 9:00 fell back to +4/32 at 9:30. The 10 yr note up 19/32 at 9:30 at 2.20% -6 bp. MBSs are looking weaker than what we expect, low volume and the Case/Shiller data this morning might be a drag. Prior to 9:30 the stock indexes were trading much weaker than at the actual open.
At 10:00 August consumer confidence; expected at 52.0 frm 59.5, fell to 44.5; the expectations index fell to 51.9 frm 74.9 and the jobs-hard-to-get index at 49.1 frm 44.8 in July. The reaction was swift; the 10 yr note jumped to +27/32 to 2.17%, mortgage prices no change on the data; the DJIA down 107. Just prior to the release the DJIA -27, the 10 yr note +23/32 and mortgage prices up 10/32 (.31 bp)
Bonds and mortgages are likely to continue sideway movement until Friday's employment data. After employment its the President and his next major speech on the 5th of Sept where he will reveal what plans he has to boost the economy, the housing markets and employment.
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, August 30, 2011
A better open this morning in the bond and mortgage markets; the stock indexes pointing to a lower open. Two days of stock market rallies generally leads to a day of decline as investors are still unwilling to jump in heavily. On the bond and mortgage markets, the rate markets are likely to continue their sideway movement until at least Friday when the August employment report is released. The MBS market continues to be volatile with price changes as much as 7/32 a click at times; this morning 30 yr MBSs traded +11/32 (.34 bp), in one trade the price fell 7/32 (.22 bp).
Charles Evans, Chicago Fed President, on CNBC this morning suggesting the Fed should be doing much more; he mentioned the Fed should increase its inflation target to 3.0% in an effort to reflate prices, he suggests he would like to see more stimulus, he wants the Fed to set a target for low rates possibly tied to employment like until the unemployment rate falls to 7.5% as an example. He isn't one in the camp that believes there will be no double dip; another Fed voice and another opinion. At 2:00 this afternoon the Fed will release the minutes of the FOMC meeting on 8/9 wherein there was a lot of dissention within the members debating the economic outlook and led up to the famous "the Fed will leave rates at these levels until mid-2013". The minutes should be interesting, if not market moving. Evans does not believe the Fed's low rates has inflated commodity prices; on that comment gold jumped $40.00.
June Case/Shiller home price index at 9:00 am; Q2 overall +3.6%; in June up 1.1%. It covers 20 cities, a lot of data that essentially doesn't have much new news in it. The index of property values in 20 cities fell 4.5% from June 2010, after a 4.6% drop in the 12 months ended May that was the biggest since 2009.
At 9:30 the DJIA opened -50; mortgage prices that were +11/32 at 9:00 fell back to +4/32 at 9:30. The 10 yr note up 19/32 at 9:30 at 2.20% -6 bp. MBSs are looking weaker than what we expect, low volume and the Case/Shiller data this morning might be a drag. Prior to 9:30 the stock indexes were trading much weaker than at the actual open.
At 10:00 August consumer confidence; expected at 52.0 frm 59.5, fell to 44.5; the expectations index fell to 51.9 frm 74.9 and the jobs-hard-to-get index at 49.1 frm 44.8 in July. The reaction was swift; the 10 yr note jumped to +27/32 to 2.17%, mortgage prices no change on the data; the DJIA down 107. Just prior to the release the DJIA -27, the 10 yr note +23/32 and mortgage prices up 10/32 (.31 bp)
Bonds and mortgages are likely to continue sideway movement until Friday's employment data. After employment its the President and his next major speech on the 5th of Sept where he will reveal what plans he has to boost the economy, the housing markets and employment.
Monday, August 29, 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, August 29, 2011
Not a good start to the week; treasuries and mortgage markets trading lower in price and higher yields, at 9:00 the 10 yr note -27/32 at 2.28% +9 bp, mortgage prices -9/32 (.28 bp) frm Friday's close. The global stock markets were better overnight and are propelling US stocks higher this morning. Last Friday Bernanke in his speech at Jackson Hole said he doesn't believe the US will enter another recession as the economy slowly improves. The Fed has no plans at the moment for another easing move, but he said the Fed will move if necessary. Meanwhile Bernanke turned US equity markets around on his economic outlook; the DJIA closed +134 Friday and at 9:00 this morning ahead of the open the DJIA +122.
At 8:30 this morning July personal income and spending; income up 0.3%, June income revised to +0.2% frm +0.1%. Spending in July was a little better than 0.5% expected, up 0.8% and added a little more strength to the pre-open trading in the indexes. The July savings rate +5.0%, down slightly from +5.5% in June. The US savings rate has been strong for the past year; prior to the 2008 calamities US savings were under 1.0%; consumers unlike politicians understand the need to cut spending and increase savings.
At 10:00 NAR June pending home sales were expected down 1.3%; as reported sales fell 1.3%; yr/yr +14.4%. Pending sales are contracts signed but not yet closed, likely some of the contracts will not close. No immediate reaction to the report.
This week is employment week; Friday the August employment report will likely keep markets from substantial moves. Of course treasuries and mortgages will be impacted by trade in the stock market. Given the trading over the last week it is looking less likely the 10 yr note will break below 2.00% and that the lows in rates may have been achieved. To attract buying in treasuries that will drop the 10 yr note below 2.00% the economic outlook would have to revert to a recession view; Bernanke took some of that outlook out of the equation in his speech.
This Week's Economic Calendar;
Today;
8:30 am July personal income and spending (as reported, income up 0.3%, spending +0.8%)
10:00 am June pending home sales (as reported -1.3%)
Tuesday;
9:00 am June Case/Shiller 20 city price index (-4.7%)
10:00 am Aug consumer confidence index (52.0 frm 59.5)
Wednesday;
7:00 am weekly MBA mortgage applications
8:15 am Aug ADP private jobs estimate (+100K)
9:45 am Chicago purchasing mgrs index (53.0 frm 58.8)
10:00 am July factory orders (+1.8%)
Thursday;
8:30 am weekly jobless claims (-10K to 407K)
Q2 productivity (-0.5%)
Q2 unit labor costs (+2.4%)
10:00 am Aug ISM manufacturing index (48.5 frm 50.9)
July construction spending (0.0%)
Friday;
8:30 am Aug employment data (unemployed 9.1%, non-farm jobs +73K, non-farm private jobs +110K)
The DJIA opened +143, the 10 yr at 9:30 -24/32 at 2.27% +8 bp and mortgage prices -8/32 (.25 bp).
In Greece its stock market put in the best performance in the last 23 years on news that tow of their banks will merge, the merger supposedly will increase the ability of the merged banks to avoid defaulting. The strength in Greece fed through most European stock markets; doesn't take a lot these days to bring out bargain hunters after how badly markets have been beaten down. The Greek two year note rate is 46%, after the country was bailed out twice by European Union partners as it struggled to service its debt. Still no real progress from Europe on all of the sovereign debt problems; the ECB, the EU, the IMF, Germany and France can't get banks to write down their loans to Greece and the other four countries that can't pay their debt.
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, August 29, 2011
Not a good start to the week; treasuries and mortgage markets trading lower in price and higher yields, at 9:00 the 10 yr note -27/32 at 2.28% +9 bp, mortgage prices -9/32 (.28 bp) frm Friday's close. The global stock markets were better overnight and are propelling US stocks higher this morning. Last Friday Bernanke in his speech at Jackson Hole said he doesn't believe the US will enter another recession as the economy slowly improves. The Fed has no plans at the moment for another easing move, but he said the Fed will move if necessary. Meanwhile Bernanke turned US equity markets around on his economic outlook; the DJIA closed +134 Friday and at 9:00 this morning ahead of the open the DJIA +122.
At 8:30 this morning July personal income and spending; income up 0.3%, June income revised to +0.2% frm +0.1%. Spending in July was a little better than 0.5% expected, up 0.8% and added a little more strength to the pre-open trading in the indexes. The July savings rate +5.0%, down slightly from +5.5% in June. The US savings rate has been strong for the past year; prior to the 2008 calamities US savings were under 1.0%; consumers unlike politicians understand the need to cut spending and increase savings.
At 10:00 NAR June pending home sales were expected down 1.3%; as reported sales fell 1.3%; yr/yr +14.4%. Pending sales are contracts signed but not yet closed, likely some of the contracts will not close. No immediate reaction to the report.
This week is employment week; Friday the August employment report will likely keep markets from substantial moves. Of course treasuries and mortgages will be impacted by trade in the stock market. Given the trading over the last week it is looking less likely the 10 yr note will break below 2.00% and that the lows in rates may have been achieved. To attract buying in treasuries that will drop the 10 yr note below 2.00% the economic outlook would have to revert to a recession view; Bernanke took some of that outlook out of the equation in his speech.
This Week's Economic Calendar;
Today;
8:30 am July personal income and spending (as reported, income up 0.3%, spending +0.8%)
10:00 am June pending home sales (as reported -1.3%)
Tuesday;
9:00 am June Case/Shiller 20 city price index (-4.7%)
10:00 am Aug consumer confidence index (52.0 frm 59.5)
Wednesday;
7:00 am weekly MBA mortgage applications
8:15 am Aug ADP private jobs estimate (+100K)
9:45 am Chicago purchasing mgrs index (53.0 frm 58.8)
10:00 am July factory orders (+1.8%)
Thursday;
8:30 am weekly jobless claims (-10K to 407K)
Q2 productivity (-0.5%)
Q2 unit labor costs (+2.4%)
10:00 am Aug ISM manufacturing index (48.5 frm 50.9)
July construction spending (0.0%)
Friday;
8:30 am Aug employment data (unemployed 9.1%, non-farm jobs +73K, non-farm private jobs +110K)
The DJIA opened +143, the 10 yr at 9:30 -24/32 at 2.27% +8 bp and mortgage prices -8/32 (.25 bp).
In Greece its stock market put in the best performance in the last 23 years on news that tow of their banks will merge, the merger supposedly will increase the ability of the merged banks to avoid defaulting. The strength in Greece fed through most European stock markets; doesn't take a lot these days to bring out bargain hunters after how badly markets have been beaten down. The Greek two year note rate is 46%, after the country was bailed out twice by European Union partners as it struggled to service its debt. Still no real progress from Europe on all of the sovereign debt problems; the ECB, the EU, the IMF, Germany and France can't get banks to write down their loans to Greece and the other four countries that can't pay their debt.
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, August 29, 2011
Not a good start to the week; treasuries and mortgage markets trading lower in price and higher yields, at 9:00 the 10 yr note -27/32 at 2.28% +9 bp, mortgage prices -9/32 (.28 bp) frm Friday's close. The global stock markets were better overnight and are propelling US stocks higher this morning. Last Friday Bernanke in his speech at Jackson Hole said he doesn't believe the US will enter another recession as the economy slowly improves. The Fed has no plans at the moment for another easing move, but he said the Fed will move if necessary. Meanwhile Bernanke turned US equity markets around on his economic outlook; the DJIA closed +134 Friday and at 9:00 this morning ahead of the open the DJIA +122.
At 8:30 this morning July personal income and spending; income up 0.3%, June income revised to +0.2% frm +0.1%. Spending in July was a little better than 0.5% expected, up 0.8% and added a little more strength to the pre-open trading in the indexes. The July savings rate +5.0%, down slightly from +5.5% in June. The US savings rate has been strong for the past year; prior to the 2008 calamities US savings were under 1.0%; consumers unlike politicians understand the need to cut spending and increase savings.
At 10:00 NAR June pending home sales were expected down 1.3%; as reported sales fell 1.3%; yr/yr +14.4%. Pending sales are contracts signed but not yet closed, likely some of the contracts will not close. No immediate reaction to the report.
This week is employment week; Friday the August employment report will likely keep markets from substantial moves. Of course treasuries and mortgages will be impacted by trade in the stock market. Given the trading over the last week it is looking less likely the 10 yr note will break below 2.00% and that the lows in rates may have been achieved. To attract buying in treasuries that will drop the 10 yr note below 2.00% the economic outlook would have to revert to a recession view; Bernanke took some of that outlook out of the equation in his speech.
This Week's Economic Calendar;
Today;
8:30 am July personal income and spending (as reported, income up 0.3%, spending +0.8%)
10:00 am June pending home sales (as reported -1.3%)
Tuesday;
9:00 am June Case/Shiller 20 city price index (-4.7%)
10:00 am Aug consumer confidence index (52.0 frm 59.5)
Wednesday;
7:00 am weekly MBA mortgage applications
8:15 am Aug ADP private jobs estimate (+100K)
9:45 am Chicago purchasing mgrs index (53.0 frm 58.8)
10:00 am July factory orders (+1.8%)
Thursday;
8:30 am weekly jobless claims (-10K to 407K)
Q2 productivity (-0.5%)
Q2 unit labor costs (+2.4%)
10:00 am Aug ISM manufacturing index (48.5 frm 50.9)
July construction spending (0.0%)
Friday;
8:30 am Aug employment data (unemployed 9.1%, non-farm jobs +73K, non-farm private jobs +110K)
The DJIA opened +143, the 10 yr at 9:30 -24/32 at 2.27% +8 bp and mortgage prices -8/32 (.25 bp).
In Greece its stock market put in the best performance in the last 23 years on news that tow of their banks will merge, the merger supposedly will increase the ability of the merged banks to avoid defaulting. The strength in Greece fed through most European stock markets; doesn't take a lot these days to bring out bargain hunters after how badly markets have been beaten down. The Greek two year note rate is 46%, after the country was bailed out twice by European Union partners as it struggled to service its debt. Still no real progress from Europe on all of the sovereign debt problems; the ECB, the EU, the IMF, Germany and France can't get banks to write down their loans to Greece and the other four countries that can't pay their debt.
Mortgage Rates
This Week; markets will focus on Friday's August employment report as the main event for the week. In the meantime there are key economic data points everyday; July personal income and spending on Monday, consumer confidence on Tuesday, Wednesday has the market-rattling ADP August private jobs estimate and the Chicago purchasing mgrs index, Thursday weekly jobless claims and the August ISM manufacturing index. Last week Bernanke didn't offer up more stimulus but said the Fed has a lot of tools in its box if needed. He once again reminded that increasing employment required more fiscal stimulus from politicians. He said the world’s biggest economy is gradually recovering, the stock market rallied on that view and the bond market also was a little better on Friday. Monday the US stock market will open better; stock markets around the world rallied Monday on Bernanke's view of US recovery.
The US bond and mortgage markets are likely to trade in a sideway pattern through the week. As long as markets believe there will not be another economic decline into recession the bellwether 10 yr note will not likely break below 2.00% and mortgage rates will likely stay about where we have them currently. This week's range for the 10 yr note and mortgage rates should be confined to 15 to 20 basis points in rates.
Mortgage Rate Update
This Week; markets will focus on Friday's August employment report as the main event for the week. In the meantime there are key economic data points everyday; July personal income and spending on Monday, consumer confidence on Tuesday, Wednesday has the market-rattling ADP August private jobs estimate and the Chicago purchasing mgrs index, Thursday weekly jobless claims and the August ISM manufacturing index. Last week Bernanke didn't offer up more stimulus but said the Fed has a lot of tools in its box if needed. He once again reminded that increasing employment required more fiscal stimulus from politicians. He said the world’s biggest economy is gradually recovering, the stock market rallied on that view and the bond market also was a little better on Friday. Monday the US stock market will open better; stock markets around the world rallied Monday on Bernanke's view of US recovery.
The US bond and mortgage markets are likely to trade in a sideway pattern through the week. As long as markets believe there will not be another economic decline into recession the bellwether 10 yr note will not likely break below 2.00% and mortgage rates will likely stay about where we have them currently. This week's range for the 10 yr note and mortgage rates should be confined to 15 to 20 basis points in rates.
This Week; markets will focus on Friday's August employment report as the main event for the week. In the meantime there are key economic data points everyday; July personal income and spending on Monday, consumer confidence on Tuesday, Wednesday has the market-rattling ADP August private jobs estimate and the Chicago purchasing mgrs index, Thursday weekly jobless claims and the August ISM manufacturing index. Last week Bernanke didn't offer up more stimulus but said the Fed has a lot of tools in its box if needed. He once again reminded that increasing employment required more fiscal stimulus from politicians. He said the world’s biggest economy is gradually recovering, the stock market rallied on that view and the bond market also was a little better on Friday. Monday the US stock market will open better; stock markets around the world rallied Monday on Bernanke's view of US recovery.
The US bond and mortgage markets are likely to trade in a sideway pattern through the week. As long as markets believe there will not be another economic decline into recession the bellwether 10 yr note will not likely break below 2.00% and mortgage rates will likely stay about where we have them currently. This week's range for the 10 yr note and mortgage rates should be confined to 15 to 20 basis points in rates.
Sunday, August 28, 2011
Monday, August 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.
Monday, August 22, 2011
Treasuries and mortgages opened weaker this morning with the US stock market aiming at a better open at 9:30. At 9:00 the 10 yr -14/32 at 2.12% +5 bp, mortgage prices -12/32 (.37 bp); the DJIA +152. Huge volatile swings in equities continues and will likely be the case through the week. This week there isn't much in the way of economic releases. At 9:30 the DJIA opened +140, the 10 yr note 2.12% +5 bp and mortgage prices -10/32 (.31 bp).
Treasury will sell $99B of notes, beginning with $35B of 2 yr notes Tuesday, $35B of 5 yr notes Wednesday and $29B of 7 yr notes on Thursday. Markets are focused on Friday when Ben Bernanke will open the Jackson Hole conference with a major statement on another Fed easing move, last year at the conference is when he announced QE 2. With the economy weakening and Europe's banks being hammered on the inability of Europe to come up with any plan that will keep the Fab five countries from defaulting on their debts (Greece, Spain, Italy, Portugal and Ireland).
There is some speculation swirling around this morning that Friday's preliminary report on Q2 GDP will be revised lower than the advance report last month (+1.3%). Q1 GDP was revised to +0.4% frm +1.9% that was reported originally. If there is a consensus, the revision is expected to +1.1% frm +1.3%.
Europe remains in the forefront as it has been for the last three weeks; every time there is a meeting of leaders optimism increases that a solution to its debt problems is at hand, every time there is disappointment to the extent Europe's bank stocks were pummeled last week and fed to US banks and in turn beat down US equity markets (DJIA -451, NASDAQ -166, and S&P -55). Steps taken by euro-area leaders to stem the region’s sovereign-debt challenges may not be enough to sustain the rally. German Chancellor Angela Merkel and French President Nicolas Sarkozy have stopped short of supporting euro bonds, which would allow nations to issue debt backed by all members of the region. Jean-Claude Trichet, head of the ECB, and his policy makers have bought government bonds in an effort to contain borrowing costs before a plan by European Union leaders goes into effect. EU leaders last month proposed expanding the role of the 440 billion euro ($632 billion) European Financial Stability Facility -- the fund that has helped bail out Greece, Ireland and Portugal -- to buy bonds in the secondary markets, aid troubled banks and offer lines of credit. The plan will go into effect after the parliaments of member nations approve it.
There are a number of firms out there expecting Bernanke will launch anther easing move to bolster the economy as it sinks back toward recession levels; equally there are a number of big bond houses that don't think another easing move will occur. Two sides to that coin; on one side another easing move could drive rates even lower, the other side is that an easing move will help the economy recover. One side is bullish the bond and mortgage markets the other is bearish for rates. All week the speculation will be a key to trading rates and equities.
This week's Economic Calendar:
Tuesday;
10:00 am July new home sales (-0.7% to 310K)
1:00 pm $35B 2 yr note auction
Wednesday;
7:00 am weekly MBA mtg applications
8:30 am July durable goods orders (+1.9%, ex transportation orders -0.4%)
10:00 am FHFA June housing price index (N/A)
1:00 pm $35B 5 yr note auction
Thursday;
8:30 am weekly jobless claims (-2K back to 400K)
1:00 pm $29B 7 yr note auction
Friday;
8:30 am Q2 preliminary GDP (+1.1% frm +1.3%)
9:55 am U. of Michigan consumer sentiment index (55.5 frm 54.9)
10:00 am Jackson Hole Bernanke speech
The bond and mortgage markets are due for a correction, higher rates. Last week the 10 yr note fell to 1.97%, as it did selling in the bond market increased. Demand for treasuries is slowing as the rates are declining and some belief the Fed can boost the economy with another easing; if the Fed does another easing it will have to be a move that will be believed to help the economy; a difficult trick to pull of, but Bernanke has pulled rabbits on a couple of occasions during his tenure.
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, August 22, 2011
Treasuries and mortgages opened weaker this morning with the US stock market aiming at a better open at 9:30. At 9:00 the 10 yr -14/32 at 2.12% +5 bp, mortgage prices -12/32 (.37 bp); the DJIA +152. Huge volatile swings in equities continues and will likely be the case through the week. This week there isn't much in the way of economic releases. At 9:30 the DJIA opened +140, the 10 yr note 2.12% +5 bp and mortgage prices -10/32 (.31 bp).
Treasury will sell $99B of notes, beginning with $35B of 2 yr notes Tuesday, $35B of 5 yr notes Wednesday and $29B of 7 yr notes on Thursday. Markets are focused on Friday when Ben Bernanke will open the Jackson Hole conference with a major statement on another Fed easing move, last year at the conference is when he announced QE 2. With the economy weakening and Europe's banks being hammered on the inability of Europe to come up with any plan that will keep the Fab five countries from defaulting on their debts (Greece, Spain, Italy, Portugal and Ireland).
There is some speculation swirling around this morning that Friday's preliminary report on Q2 GDP will be revised lower than the advance report last month (+1.3%). Q1 GDP was revised to +0.4% frm +1.9% that was reported originally. If there is a consensus, the revision is expected to +1.1% frm +1.3%.
Europe remains in the forefront as it has been for the last three weeks; every time there is a meeting of leaders optimism increases that a solution to its debt problems is at hand, every time there is disappointment to the extent Europe's bank stocks were pummeled last week and fed to US banks and in turn beat down US equity markets (DJIA -451, NASDAQ -166, and S&P -55). Steps taken by euro-area leaders to stem the region’s sovereign-debt challenges may not be enough to sustain the rally. German Chancellor Angela Merkel and French President Nicolas Sarkozy have stopped short of supporting euro bonds, which would allow nations to issue debt backed by all members of the region. Jean-Claude Trichet, head of the ECB, and his policy makers have bought government bonds in an effort to contain borrowing costs before a plan by European Union leaders goes into effect. EU leaders last month proposed expanding the role of the 440 billion euro ($632 billion) European Financial Stability Facility -- the fund that has helped bail out Greece, Ireland and Portugal -- to buy bonds in the secondary markets, aid troubled banks and offer lines of credit. The plan will go into effect after the parliaments of member nations approve it.
There are a number of firms out there expecting Bernanke will launch anther easing move to bolster the economy as it sinks back toward recession levels; equally there are a number of big bond houses that don't think another easing move will occur. Two sides to that coin; on one side another easing move could drive rates even lower, the other side is that an easing move will help the economy recover. One side is bullish the bond and mortgage markets the other is bearish for rates. All week the speculation will be a key to trading rates and equities.
This week's Economic Calendar:
Tuesday;
10:00 am July new home sales (-0.7% to 310K)
1:00 pm $35B 2 yr note auction
Wednesday;
7:00 am weekly MBA mtg applications
8:30 am July durable goods orders (+1.9%, ex transportation orders -0.4%)
10:00 am FHFA June housing price index (N/A)
1:00 pm $35B 5 yr note auction
Thursday;
8:30 am weekly jobless claims (-2K back to 400K)
1:00 pm $29B 7 yr note auction
Friday;
8:30 am Q2 preliminary GDP (+1.1% frm +1.3%)
9:55 am U. of Michigan consumer sentiment index (55.5 frm 54.9)
10:00 am Jackson Hole Bernanke speech
The bond and mortgage markets are due for a correction, higher rates. Last week the 10 yr note fell to 1.97%, as it did selling in the bond market increased. Demand for treasuries is slowing as the rates are declining and some belief the Fed can boost the economy with another easing; if the Fed does another easing it will have to be a move that will be believed to help the economy; a difficult trick to pull of, but Bernanke has pulled rabbits on a couple of occasions during his tenure.
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, August 22, 2011
Treasuries and mortgages opened weaker this morning with the US stock market aiming at a better open at 9:30. At 9:00 the 10 yr -14/32 at 2.12% +5 bp, mortgage prices -12/32 (.37 bp); the DJIA +152. Huge volatile swings in equities continues and will likely be the case through the week. This week there isn't much in the way of economic releases. At 9:30 the DJIA opened +140, the 10 yr note 2.12% +5 bp and mortgage prices -10/32 (.31 bp).
Treasury will sell $99B of notes, beginning with $35B of 2 yr notes Tuesday, $35B of 5 yr notes Wednesday and $29B of 7 yr notes on Thursday. Markets are focused on Friday when Ben Bernanke will open the Jackson Hole conference with a major statement on another Fed easing move, last year at the conference is when he announced QE 2. With the economy weakening and Europe's banks being hammered on the inability of Europe to come up with any plan that will keep the Fab five countries from defaulting on their debts (Greece, Spain, Italy, Portugal and Ireland).
There is some speculation swirling around this morning that Friday's preliminary report on Q2 GDP will be revised lower than the advance report last month (+1.3%). Q1 GDP was revised to +0.4% frm +1.9% that was reported originally. If there is a consensus, the revision is expected to +1.1% frm +1.3%.
Europe remains in the forefront as it has been for the last three weeks; every time there is a meeting of leaders optimism increases that a solution to its debt problems is at hand, every time there is disappointment to the extent Europe's bank stocks were pummeled last week and fed to US banks and in turn beat down US equity markets (DJIA -451, NASDAQ -166, and S&P -55). Steps taken by euro-area leaders to stem the region’s sovereign-debt challenges may not be enough to sustain the rally. German Chancellor Angela Merkel and French President Nicolas Sarkozy have stopped short of supporting euro bonds, which would allow nations to issue debt backed by all members of the region. Jean-Claude Trichet, head of the ECB, and his policy makers have bought government bonds in an effort to contain borrowing costs before a plan by European Union leaders goes into effect. EU leaders last month proposed expanding the role of the 440 billion euro ($632 billion) European Financial Stability Facility -- the fund that has helped bail out Greece, Ireland and Portugal -- to buy bonds in the secondary markets, aid troubled banks and offer lines of credit. The plan will go into effect after the parliaments of member nations approve it.
There are a number of firms out there expecting Bernanke will launch anther easing move to bolster the economy as it sinks back toward recession levels; equally there are a number of big bond houses that don't think another easing move will occur. Two sides to that coin; on one side another easing move could drive rates even lower, the other side is that an easing move will help the economy recover. One side is bullish the bond and mortgage markets the other is bearish for rates. All week the speculation will be a key to trading rates and equities.
This week's Economic Calendar:
Tuesday;
10:00 am July new home sales (-0.7% to 310K)
1:00 pm $35B 2 yr note auction
Wednesday;
7:00 am weekly MBA mtg applications
8:30 am July durable goods orders (+1.9%, ex transportation orders -0.4%)
10:00 am FHFA June housing price index (N/A)
1:00 pm $35B 5 yr note auction
Thursday;
8:30 am weekly jobless claims (-2K back to 400K)
1:00 pm $29B 7 yr note auction
Friday;
8:30 am Q2 preliminary GDP (+1.1% frm +1.3%)
9:55 am U. of Michigan consumer sentiment index (55.5 frm 54.9)
10:00 am Jackson Hole Bernanke speech
The bond and mortgage markets are due for a correction, higher rates. Last week the 10 yr note fell to 1.97%, as it did selling in the bond market increased. Demand for treasuries is slowing as the rates are declining and some belief the Fed can boost the economy with another easing; if the Fed does another easing it will have to be a move that will be believed to help the economy; a difficult trick to pull of, but Bernanke has pulled rabbits on a couple of occasions during his tenure.
Friday, August 19, 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, August 19, 2011
Very early this morning global stock markets have been hit hard again from Asia to Europe and in the US futures pre-opening trading. Last night the US 10 yr note traded down to 2.03%, it may have been lower but at 2:00 am this morning that is where it sat. At 8:00 this morning even with stocks expected to open lower again. the 10 yr note was off 10/32 at 2.10% +3 bp and mortgages were down as much as 14/32 (.44 bp) frm yesterday's close. Volatility continues to increase, as it does the risks increase, whether trading interest rates, currencies or stocks.
Today is going to be very interesting in the bond and mortgage markets; at 9:00 the 10 yr note traded down 5/32 at 2.09% +2 bp and mortgage prices were down 14/32 (.44 bp) frm yesterday's close. At 9:00 the DJIA -137, NASDAQ -22, and S&P -15, and gold up $31.00. That US treasuries and mortgages are trading lower with the stock market also being hit goes contrary to what has been the norm for months. The question now, and one that I don't have an answer, have the US interest rate markets hit their lows in yields? Yesterday the 10 yr made a run down to 1.97% but it quickly jumped back above 2.00% ending the day at 2.07%, last night the 10 made another run towards 2.00% and failed again.
Just about every firm has now lowered the growth forecasts for the US economy. Recession is now the new word of the day. In Europe the banking system remains fragile; earlier this week France and Germany met, avoiding any comments about issuing euro bonds to shore up banks. Early this morning the EU reported it may present draft legislation along with a report on the feasibility of common bonds. More than $6 trillion has been erased from the value of global equities this month on signs the U.S. recovery is stumbling, while the cost of insuring European sovereign debt is back to levels that triggered the region’s central bank to buy Italian and Spanish bonds on Aug. 8.
Bank of America, troubled by increasing losses on mortgage foreclosures and penalties for improper foreclosure processes, announced it will cut another 3500 jobs; previously the bank cut 2500 jobs. Its stock is tumbling as are all the big banks in the US that may have counter-party risks with banks in Europe that are suffering huge losses on their stocks and losses expected when those banks have to write down sovereign debt to the Fab five countries unable to pay their debts.
There are no economic releases to think about today; the stock market trading will dominate all news again today. Going into the weekend traders are likely to level off some of the bearish trades. Although the stock market is opening lower, we wouldn't be surprised that by the end of the day losses may be pared back. Investors are scrambling for liquidity as the economic outlook has turned 180 degrees in just three weeks.
At 9:30 the DJIA opened -95, NASDAQ -24, S&P -9; the open wasn't quite as bad as futures markets were implying. The 10 yr note at 9:30 improved to -3/32 while mortgage prices were -9/32 (.28 bp) frm yesterday's closes. Trade is unusual this morning, there is no movement into US treasuries on additional safe haven buying, it looks like investors are choosing to go into gold and not treasuries, at least so far. The day is setting up for even more potential of volatility; the bond and mortgage markets are surprising traders, actually weaker on another decline in equities.
Treasuries and mortgage markets are unusually soft this morning with the stock market weaker, if the equity markets reverse and improve this afternoon treasuries and mortgages may take additional hits. Technically the 10 failing to hold at 2.00% is momentarily troubling, we have to back 60 years to find interest rates this low. By 10:00 the stock indexes have already shed their opening levels, although still weaker markets are finding some support. Be extremely careful now in floating loans; we suggest locking until the 10 yr can move below 2.00% (it can). Rates are increasing this morning. Interest rate markets at the moment are questionable as to how they will trade the rest of the day. Be very careful now.
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, August 19, 2011
Very early this morning global stock markets have been hit hard again from Asia to Europe and in the US futures pre-opening trading. Last night the US 10 yr note traded down to 2.03%, it may have been lower but at 2:00 am this morning that is where it sat. At 8:00 this morning even with stocks expected to open lower again. the 10 yr note was off 10/32 at 2.10% +3 bp and mortgages were down as much as 14/32 (.44 bp) frm yesterday's close. Volatility continues to increase, as it does the risks increase, whether trading interest rates, currencies or stocks.
Today is going to be very interesting in the bond and mortgage markets; at 9:00 the 10 yr note traded down 5/32 at 2.09% +2 bp and mortgage prices were down 14/32 (.44 bp) frm yesterday's close. At 9:00 the DJIA -137, NASDAQ -22, and S&P -15, and gold up $31.00. That US treasuries and mortgages are trading lower with the stock market also being hit goes contrary to what has been the norm for months. The question now, and one that I don't have an answer, have the US interest rate markets hit their lows in yields? Yesterday the 10 yr made a run down to 1.97% but it quickly jumped back above 2.00% ending the day at 2.07%, last night the 10 made another run towards 2.00% and failed again.
Just about every firm has now lowered the growth forecasts for the US economy. Recession is now the new word of the day. In Europe the banking system remains fragile; earlier this week France and Germany met, avoiding any comments about issuing euro bonds to shore up banks. Early this morning the EU reported it may present draft legislation along with a report on the feasibility of common bonds. More than $6 trillion has been erased from the value of global equities this month on signs the U.S. recovery is stumbling, while the cost of insuring European sovereign debt is back to levels that triggered the region’s central bank to buy Italian and Spanish bonds on Aug. 8.
Bank of America, troubled by increasing losses on mortgage foreclosures and penalties for improper foreclosure processes, announced it will cut another 3500 jobs; previously the bank cut 2500 jobs. Its stock is tumbling as are all the big banks in the US that may have counter-party risks with banks in Europe that are suffering huge losses on their stocks and losses expected when those banks have to write down sovereign debt to the Fab five countries unable to pay their debts.
There are no economic releases to think about today; the stock market trading will dominate all news again today. Going into the weekend traders are likely to level off some of the bearish trades. Although the stock market is opening lower, we wouldn't be surprised that by the end of the day losses may be pared back. Investors are scrambling for liquidity as the economic outlook has turned 180 degrees in just three weeks.
At 9:30 the DJIA opened -95, NASDAQ -24, S&P -9; the open wasn't quite as bad as futures markets were implying. The 10 yr note at 9:30 improved to -3/32 while mortgage prices were -9/32 (.28 bp) frm yesterday's closes. Trade is unusual this morning, there is no movement into US treasuries on additional safe haven buying, it looks like investors are choosing to go into gold and not treasuries, at least so far. The day is setting up for even more potential of volatility; the bond and mortgage markets are surprising traders, actually weaker on another decline in equities.
Treasuries and mortgage markets are unusually soft this morning with the stock market weaker, if the equity markets reverse and improve this afternoon treasuries and mortgages may take additional hits. Technically the 10 failing to hold at 2.00% is momentarily troubling, we have to back 60 years to find interest rates this low. By 10:00 the stock indexes have already shed their opening levels, although still weaker markets are finding some support. Be extremely careful now in floating loans; we suggest locking until the 10 yr can move below 2.00% (it can). Rates are increasing this morning. Interest rate markets at the moment are questionable as to how they will trade the rest of the day. Be very careful now.
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, August 19, 2011
Very early this morning global stock markets have been hit hard again from Asia to Europe and in the US futures pre-opening trading. Last night the US 10 yr note traded down to 2.03%, it may have been lower but at 2:00 am this morning that is where it sat. At 8:00 this morning even with stocks expected to open lower again. the 10 yr note was off 10/32 at 2.10% +3 bp and mortgages were down as much as 14/32 (.44 bp) frm yesterday's close. Volatility continues to increase, as it does the risks increase, whether trading interest rates, currencies or stocks.
Today is going to be very interesting in the bond and mortgage markets; at 9:00 the 10 yr note traded down 5/32 at 2.09% +2 bp and mortgage prices were down 14/32 (.44 bp) frm yesterday's close. At 9:00 the DJIA -137, NASDAQ -22, and S&P -15, and gold up $31.00. That US treasuries and mortgages are trading lower with the stock market also being hit goes contrary to what has been the norm for months. The question now, and one that I don't have an answer, have the US interest rate markets hit their lows in yields? Yesterday the 10 yr made a run down to 1.97% but it quickly jumped back above 2.00% ending the day at 2.07%, last night the 10 made another run towards 2.00% and failed again.
Just about every firm has now lowered the growth forecasts for the US economy. Recession is now the new word of the day. In Europe the banking system remains fragile; earlier this week France and Germany met, avoiding any comments about issuing euro bonds to shore up banks. Early this morning the EU reported it may present draft legislation along with a report on the feasibility of common bonds. More than $6 trillion has been erased from the value of global equities this month on signs the U.S. recovery is stumbling, while the cost of insuring European sovereign debt is back to levels that triggered the region’s central bank to buy Italian and Spanish bonds on Aug. 8.
Bank of America, troubled by increasing losses on mortgage foreclosures and penalties for improper foreclosure processes, announced it will cut another 3500 jobs; previously the bank cut 2500 jobs. Its stock is tumbling as are all the big banks in the US that may have counter-party risks with banks in Europe that are suffering huge losses on their stocks and losses expected when those banks have to write down sovereign debt to the Fab five countries unable to pay their debts.
There are no economic releases to think about today; the stock market trading will dominate all news again today. Going into the weekend traders are likely to level off some of the bearish trades. Although the stock market is opening lower, we wouldn't be surprised that by the end of the day losses may be pared back. Investors are scrambling for liquidity as the economic outlook has turned 180 degrees in just three weeks.
At 9:30 the DJIA opened -95, NASDAQ -24, S&P -9; the open wasn't quite as bad as futures markets were implying. The 10 yr note at 9:30 improved to -3/32 while mortgage prices were -9/32 (.28 bp) frm yesterday's closes. Trade is unusual this morning, there is no movement into US treasuries on additional safe haven buying, it looks like investors are choosing to go into gold and not treasuries, at least so far. The day is setting up for even more potential of volatility; the bond and mortgage markets are surprising traders, actually weaker on another decline in equities.
Treasuries and mortgage markets are unusually soft this morning with the stock market weaker, if the equity markets reverse and improve this afternoon treasuries and mortgages may take additional hits. Technically the 10 failing to hold at 2.00% is momentarily troubling, we have to back 60 years to find interest rates this low. By 10:00 the stock indexes have already shed their opening levels, although still weaker markets are finding some support. Be extremely careful now in floating loans; we suggest locking until the 10 yr can move below 2.00% (it can). Rates are increasing this morning. Interest rate markets at the moment are questionable as to how they will trade the rest of the day. Be very careful now.
Thursday, August 18, 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, August 18, 2011
The US stock market is being hit hard this morning on continued weakness in Europe's bank stocks that are seeing heavy selling. This morning the bond and mortgage markets opened strong, the 10 yr note at 2.10% at 8:30, mortgage prices +8/32 (.25 bp), the DJIA futures index -231. The situation in Europe over sovereign debt problems in five of its EU countries isn't getting any closer to a resolution. Tuesday France and German leaders met, it was in market terms a non-event; neither country is willing to do much more to come up with a workable plan, assuming of course there is a chance. Investors are increasingly more concerned the banks in Europe are unprepared for the possibility that there could be actual defaults. The infection in Europe is quickly moving to the US and the economic outlook. Banks in Europe are being hit hard today, down about 8.0% on many bank stocks, even with short selling bans in place in many countries; US and Asian banks are increasingly unwilling to lend the Europe's banks.
The WSJ reported that U.S. regulators are stepping up scrutiny of local operations for Europe’s largest banks on concern that the sovereign debt crisis may lead to funding problems. The Federal Reserve Bank of New York has been holding talks with the lenders and sought information about their access to funds to maintain operations in the U.S., the newspaper said, citing people it didn’t identify. Europe and its regulators, the IMF and the ECB have made little or no progress toward a plan to avoid defaults; the result is dragging US stocks lower this morning and increasing the idea the US economy will decline further.
Two data points at 8:30; weekly jobless claims increased 9K to back above 400K to 408K, its been 16 weeks with clams at or above 400K (last week's claims revised to 399K frm 395K). Continuing claims increased 7K to 3.702 mil. July consumer price index jumped 0.5%, over twice the expected increase (0.2%); the core rate however was up 0.2% as expected. Yr/yr overall CPI +3.6%, yr/yr on the core rate +1.8%. CPI more tame than producer prices, but may see increase next month if producers have to push through their increasing costs. There was no reaction in markets over the 8:30 data.
At 9:30 the DJIA opened down 230 points, the 10 yr note +30/32 at 2.06% -11 bp and mortgages +17/32 (.53 bp). Gold jumping over $1800.00 to $1821.00. Not a pretty picture to start the day.
Three key economic releases at 10:00. August Philadelphia Fed business index, expected at 4.0 frm 3.2 in July, shocked, down to -30.7, new orders index -26.8, employment component -5.2 frm +8.9 in July. The report is rocking markets even more than prior to the data; any index read under zero is considered contraction, this was a huge hit. More bad news; July existing home sales were expected to be up 3.0%, sales as reported declined 3.5% to 4.67 mil against forecasts of 4.92 mil. The only bright point today, July leading economic indicators were up 0.5%, a little higher but always overlooked by traders. The 10:00 data pushed the 10 yr note yield to 1.97% on the knee jerk reaction.
Interest rates crumbling this morning as the stock market is being hit hard. Mortgage rates and prices improving but will likely drag treasuries with lenders still facing huge problems with re-financing locks that for the most part are falling through the cracks; one lender pointing out the pull-through rate is a low as 20%. That seems extremely low, but it indicates that many of the re-finance applications will not make it to closing, either because of appraisals, credit scores, lack of equity or just backing off as rates decline.
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, August 18, 2011
The US stock market is being hit hard this morning on continued weakness in Europe's bank stocks that are seeing heavy selling. This morning the bond and mortgage markets opened strong, the 10 yr note at 2.10% at 8:30, mortgage prices +8/32 (.25 bp), the DJIA futures index -231. The situation in Europe over sovereign debt problems in five of its EU countries isn't getting any closer to a resolution. Tuesday France and German leaders met, it was in market terms a non-event; neither country is willing to do much more to come up with a workable plan, assuming of course there is a chance. Investors are increasingly more concerned the banks in Europe are unprepared for the possibility that there could be actual defaults. The infection in Europe is quickly moving to the US and the economic outlook. Banks in Europe are being hit hard today, down about 8.0% on many bank stocks, even with short selling bans in place in many countries; US and Asian banks are increasingly unwilling to lend the Europe's banks.
The WSJ reported that U.S. regulators are stepping up scrutiny of local operations for Europe’s largest banks on concern that the sovereign debt crisis may lead to funding problems. The Federal Reserve Bank of New York has been holding talks with the lenders and sought information about their access to funds to maintain operations in the U.S., the newspaper said, citing people it didn’t identify. Europe and its regulators, the IMF and the ECB have made little or no progress toward a plan to avoid defaults; the result is dragging US stocks lower this morning and increasing the idea the US economy will decline further.
Two data points at 8:30; weekly jobless claims increased 9K to back above 400K to 408K, its been 16 weeks with clams at or above 400K (last week's claims revised to 399K frm 395K). Continuing claims increased 7K to 3.702 mil. July consumer price index jumped 0.5%, over twice the expected increase (0.2%); the core rate however was up 0.2% as expected. Yr/yr overall CPI +3.6%, yr/yr on the core rate +1.8%. CPI more tame than producer prices, but may see increase next month if producers have to push through their increasing costs. There was no reaction in markets over the 8:30 data.
At 9:30 the DJIA opened down 230 points, the 10 yr note +30/32 at 2.06% -11 bp and mortgages +17/32 (.53 bp). Gold jumping over $1800.00 to $1821.00. Not a pretty picture to start the day.
Three key economic releases at 10:00. August Philadelphia Fed business index, expected at 4.0 frm 3.2 in July, shocked, down to -30.7, new orders index -26.8, employment component -5.2 frm +8.9 in July. The report is rocking markets even more than prior to the data; any index read under zero is considered contraction, this was a huge hit. More bad news; July existing home sales were expected to be up 3.0%, sales as reported declined 3.5% to 4.67 mil against forecasts of 4.92 mil. The only bright point today, July leading economic indicators were up 0.5%, a little higher but always overlooked by traders. The 10:00 data pushed the 10 yr note yield to 1.97% on the knee jerk reaction.
Interest rates crumbling this morning as the stock market is being hit hard. Mortgage rates and prices improving but will likely drag treasuries with lenders still facing huge problems with re-financing locks that for the most part are falling through the cracks; one lender pointing out the pull-through rate is a low as 20%. That seems extremely low, but it indicates that many of the re-finance applications will not make it to closing, either because of appraisals, credit scores, lack of equity or just backing off as rates decline.
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, August 18, 2011
The US stock market is being hit hard this morning on continued weakness in Europe's bank stocks that are seeing heavy selling. This morning the bond and mortgage markets opened strong, the 10 yr note at 2.10% at 8:30, mortgage prices +8/32 (.25 bp), the DJIA futures index -231. The situation in Europe over sovereign debt problems in five of its EU countries isn't getting any closer to a resolution. Tuesday France and German leaders met, it was in market terms a non-event; neither country is willing to do much more to come up with a workable plan, assuming of course there is a chance. Investors are increasingly more concerned the banks in Europe are unprepared for the possibility that there could be actual defaults. The infection in Europe is quickly moving to the US and the economic outlook. Banks in Europe are being hit hard today, down about 8.0% on many bank stocks, even with short selling bans in place in many countries; US and Asian banks are increasingly unwilling to lend the Europe's banks.
The WSJ reported that U.S. regulators are stepping up scrutiny of local operations for Europe’s largest banks on concern that the sovereign debt crisis may lead to funding problems. The Federal Reserve Bank of New York has been holding talks with the lenders and sought information about their access to funds to maintain operations in the U.S., the newspaper said, citing people it didn’t identify. Europe and its regulators, the IMF and the ECB have made little or no progress toward a plan to avoid defaults; the result is dragging US stocks lower this morning and increasing the idea the US economy will decline further.
Two data points at 8:30; weekly jobless claims increased 9K to back above 400K to 408K, its been 16 weeks with clams at or above 400K (last week's claims revised to 399K frm 395K). Continuing claims increased 7K to 3.702 mil. July consumer price index jumped 0.5%, over twice the expected increase (0.2%); the core rate however was up 0.2% as expected. Yr/yr overall CPI +3.6%, yr/yr on the core rate +1.8%. CPI more tame than producer prices, but may see increase next month if producers have to push through their increasing costs. There was no reaction in markets over the 8:30 data.
At 9:30 the DJIA opened down 230 points, the 10 yr note +30/32 at 2.06% -11 bp and mortgages +17/32 (.53 bp). Gold jumping over $1800.00 to $1821.00. Not a pretty picture to start the day.
Three key economic releases at 10:00. August Philadelphia Fed business index, expected at 4.0 frm 3.2 in July, shocked, down to -30.7, new orders index -26.8, employment component -5.2 frm +8.9 in July. The report is rocking markets even more than prior to the data; any index read under zero is considered contraction, this was a huge hit. More bad news; July existing home sales were expected to be up 3.0%, sales as reported declined 3.5% to 4.67 mil against forecasts of 4.92 mil. The only bright point today, July leading economic indicators were up 0.5%, a little higher but always overlooked by traders. The 10:00 data pushed the 10 yr note yield to 1.97% on the knee jerk reaction.
Interest rates crumbling this morning as the stock market is being hit hard. Mortgage rates and prices improving but will likely drag treasuries with lenders still facing huge problems with re-financing locks that for the most part are falling through the cracks; one lender pointing out the pull-through rate is a low as 20%. That seems extremely low, but it indicates that many of the re-finance applications will not make it to closing, either because of appraisals, credit scores, lack of equity or just backing off as rates decline.
Wednesday, August 17, 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, August 17, 2011
Yesterday the bond and mortgage markets improved, the stock market declined; on Monday the bond and mortgage markets declined while the stock market rallied. This morning markets continue their now almost predictable moves; since yesterday was a down day for stocks, today is likely an up day and will keep mortgage prices lower. It is becoming a trend; whatever markets do one day, the next day will be the opposite. Meanwhile mortgage lenders continue to set prices that don't always follow the actual market to control flow. Some lenders appear to be unable to keep up with the increased volume and price defensively.
July producer price index at 8:30 was a little stronger than expected; overall PPI increased 0.2% but the core, ex food and energy expected up 0.2% increased 0.4%, Yr/yr overall PPI +7.2% and yr/yr core +2.5%. Treasuries and mortgage markets didn't show any reaction to the hotter inflation core rate. With the US and global economies sluggish there is little concern that inflation will take hold. I am somewhat surprised that the bond market didn't react to the increase on the core inflation rate at 2.5% yr/yr, that is the level of the Fed's target range for the core.
European stocks are little changed, paring earlier losses after German Chancellor Angela Merkel and French President Nicolas Sarkozy yesterday rejected an expansion of the region’s rescue fund and rebuffed calls for joint euro borrowing. Asian shares and U.S. index futures are doing a little better this morning in pre-market trading, at 9:00 the DJIA was up 22 points but had backed off better levels seen at 8:00 am.
At 9:30 the DJIA opened +34, the 10 yr note +1/32 at 2.22% and mortgage prices +2/32 (.06 bp) frm yesterday's close. At 9:15 mortgage prices were down 1.32 (.03 bp). By 10:00 stock indexes are moving higher (+91 on the DJIA), the 10 yr note -4/32 and mortgage prices +1/32 (.03 bp).
At 7:00 this morning the weekly MBA mortgage applications. The ongoing drop in interest rates is driving refinancing demand higher but, unfortunately, has yet to drive up demand for home purchases. The refinancing index extended its run of jumps in the August 12 week with an 8.0% gain after a 30% increase last week. The purchase index continues to show weakness, down a very steep 9.1%. The rate for 30-year mortgages fell five basis points in the week to 4.32% with the 15-year rate also down five basis points, to 3.47%; a new low rate. Consumers still not stepping up to buy, very low prices and interest rates have yet to show and positive impact in the housing sector. After the Washington clown act over the debt ceiling and spending cuts, consumer sentiment took a dip. Job insecurity continues, debt deleveraging by consumers is continuing.
Pres Obama will make a Labor Day speech calling on Congress for more money to increase employment. The president also will call for long-term cuts beyond the $1.5 trillion that Congress charged a 12-member bipartisan “super- committee” of lawmakers to trim. His plan will likely have a mix of tax cuts and infrastructure spending and will include proposals beyond the ideas that he has mentioned on his current Midwest bus tour, such as extending a payroll tax cut for workers and unemployment insurance benefits. In addition to tax cuts and infrastructure spending, Obama will offer proposals targeted for the long-term unemployed. The dollar amount of the additional long-term deficit reduction measures will exceed the cost of the new short-term spending that he will propose. On his bus tour the president outlined a number of measures that he wants Congress to approve, including renewing a payroll tax cut for workers, revamping the patent process, approving free-trade deals and setting up a so-called infrastructure bank to help fund construction projects such as road-building.
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, August 17, 2011
Yesterday the bond and mortgage markets improved, the stock market declined; on Monday the bond and mortgage markets declined while the stock market rallied. This morning markets continue their now almost predictable moves; since yesterday was a down day for stocks, today is likely an up day and will keep mortgage prices lower. It is becoming a trend; whatever markets do one day, the next day will be the opposite. Meanwhile mortgage lenders continue to set prices that don't always follow the actual market to control flow. Some lenders appear to be unable to keep up with the increased volume and price defensively.
July producer price index at 8:30 was a little stronger than expected; overall PPI increased 0.2% but the core, ex food and energy expected up 0.2% increased 0.4%, Yr/yr overall PPI +7.2% and yr/yr core +2.5%. Treasuries and mortgage markets didn't show any reaction to the hotter inflation core rate. With the US and global economies sluggish there is little concern that inflation will take hold. I am somewhat surprised that the bond market didn't react to the increase on the core inflation rate at 2.5% yr/yr, that is the level of the Fed's target range for the core.
European stocks are little changed, paring earlier losses after German Chancellor Angela Merkel and French President Nicolas Sarkozy yesterday rejected an expansion of the region’s rescue fund and rebuffed calls for joint euro borrowing. Asian shares and U.S. index futures are doing a little better this morning in pre-market trading, at 9:00 the DJIA was up 22 points but had backed off better levels seen at 8:00 am.
At 9:30 the DJIA opened +34, the 10 yr note +1/32 at 2.22% and mortgage prices +2/32 (.06 bp) frm yesterday's close. At 9:15 mortgage prices were down 1.32 (.03 bp). By 10:00 stock indexes are moving higher (+91 on the DJIA), the 10 yr note -4/32 and mortgage prices +1/32 (.03 bp).
At 7:00 this morning the weekly MBA mortgage applications. The ongoing drop in interest rates is driving refinancing demand higher but, unfortunately, has yet to drive up demand for home purchases. The refinancing index extended its run of jumps in the August 12 week with an 8.0% gain after a 30% increase last week. The purchase index continues to show weakness, down a very steep 9.1%. The rate for 30-year mortgages fell five basis points in the week to 4.32% with the 15-year rate also down five basis points, to 3.47%; a new low rate. Consumers still not stepping up to buy, very low prices and interest rates have yet to show and positive impact in the housing sector. After the Washington clown act over the debt ceiling and spending cuts, consumer sentiment took a dip. Job insecurity continues, debt deleveraging by consumers is continuing.
Pres Obama will make a Labor Day speech calling on Congress for more money to increase employment. The president also will call for long-term cuts beyond the $1.5 trillion that Congress charged a 12-member bipartisan “super- committee” of lawmakers to trim. His plan will likely have a mix of tax cuts and infrastructure spending and will include proposals beyond the ideas that he has mentioned on his current Midwest bus tour, such as extending a payroll tax cut for workers and unemployment insurance benefits. In addition to tax cuts and infrastructure spending, Obama will offer proposals targeted for the long-term unemployed. The dollar amount of the additional long-term deficit reduction measures will exceed the cost of the new short-term spending that he will propose. On his bus tour the president outlined a number of measures that he wants Congress to approve, including renewing a payroll tax cut for workers, revamping the patent process, approving free-trade deals and setting up a so-called infrastructure bank to help fund construction projects such as road-building.
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, August 17, 2011
Yesterday the bond and mortgage markets improved, the stock market declined; on Monday the bond and mortgage markets declined while the stock market rallied. This morning markets continue their now almost predictable moves; since yesterday was a down day for stocks, today is likely an up day and will keep mortgage prices lower. It is becoming a trend; whatever markets do one day, the next day will be the opposite. Meanwhile mortgage lenders continue to set prices that don't always follow the actual market to control flow. Some lenders appear to be unable to keep up with the increased volume and price defensively.
July producer price index at 8:30 was a little stronger than expected; overall PPI increased 0.2% but the core, ex food and energy expected up 0.2% increased 0.4%, Yr/yr overall PPI +7.2% and yr/yr core +2.5%. Treasuries and mortgage markets didn't show any reaction to the hotter inflation core rate. With the US and global economies sluggish there is little concern that inflation will take hold. I am somewhat surprised that the bond market didn't react to the increase on the core inflation rate at 2.5% yr/yr, that is the level of the Fed's target range for the core.
European stocks are little changed, paring earlier losses after German Chancellor Angela Merkel and French President Nicolas Sarkozy yesterday rejected an expansion of the region’s rescue fund and rebuffed calls for joint euro borrowing. Asian shares and U.S. index futures are doing a little better this morning in pre-market trading, at 9:00 the DJIA was up 22 points but had backed off better levels seen at 8:00 am.
At 9:30 the DJIA opened +34, the 10 yr note +1/32 at 2.22% and mortgage prices +2/32 (.06 bp) frm yesterday's close. At 9:15 mortgage prices were down 1.32 (.03 bp). By 10:00 stock indexes are moving higher (+91 on the DJIA), the 10 yr note -4/32 and mortgage prices +1/32 (.03 bp).
At 7:00 this morning the weekly MBA mortgage applications. The ongoing drop in interest rates is driving refinancing demand higher but, unfortunately, has yet to drive up demand for home purchases. The refinancing index extended its run of jumps in the August 12 week with an 8.0% gain after a 30% increase last week. The purchase index continues to show weakness, down a very steep 9.1%. The rate for 30-year mortgages fell five basis points in the week to 4.32% with the 15-year rate also down five basis points, to 3.47%; a new low rate. Consumers still not stepping up to buy, very low prices and interest rates have yet to show and positive impact in the housing sector. After the Washington clown act over the debt ceiling and spending cuts, consumer sentiment took a dip. Job insecurity continues, debt deleveraging by consumers is continuing.
Pres Obama will make a Labor Day speech calling on Congress for more money to increase employment. The president also will call for long-term cuts beyond the $1.5 trillion that Congress charged a 12-member bipartisan “super- committee” of lawmakers to trim. His plan will likely have a mix of tax cuts and infrastructure spending and will include proposals beyond the ideas that he has mentioned on his current Midwest bus tour, such as extending a payroll tax cut for workers and unemployment insurance benefits. In addition to tax cuts and infrastructure spending, Obama will offer proposals targeted for the long-term unemployed. The dollar amount of the additional long-term deficit reduction measures will exceed the cost of the new short-term spending that he will propose. On his bus tour the president outlined a number of measures that he wants Congress to approve, including renewing a payroll tax cut for workers, revamping the patent process, approving free-trade deals and setting up a so-called infrastructure bank to help fund construction projects such as road-building.
Tuesday, August 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.
Tuesday, August 16, 2011
Treasuries and mortgages started a little better this morning with the stock indexes trading lower, suggesting a weak opening at 9:30. Mortgage markets stalled here for the last few days with markets consolidating recent strong moves. The stock market put three consecutive days up or the best showing in weeks, this morning a little pullback on the open.
At 8:30 July housing starts were expected down 3,5% but declined just 1.5%; building permits were right on forecasts, down 3.2%. Housing still n depression and likely will continue to be well into next year. Housing starts so far this year are running on a 566,000 pace for all of 2011. The result compares with last year’s tally of 587,000 starts, the second-fewest on record. Home construction totaled 554,000 units in 2009, the lowest since record-keeping began in 1959. During the past decade’s housing boom, starts reached a peak of 2.07 million in 2005. (data frm Bloomberg)
July import prices were up 0.3% while US export prices declined 0.4%. Paying more for imports while earning less on exports. July imports followed a revised 0.6% drop in June.
At 9:15 July industrial production, expected +0.4%, increased 0.9%; July capacity utilization, expected at 77.0% frm 76.7% in June increased to 77.5%. Better than expectations pushed treasuries down a little and mortgages lower. The better reports on housing starts and industrial production and capacity utilization helped take some pressure off stock indexes which were down 100 points on the DJIA to -55.
Fitch out this morning affirming US credit rating at AAA; S&P lowered the US rating to AA2 and sent the stock market into a tail spin before recovering the last three days. S&P is feeling the pressure over its US downgrade. Eleven days after lowering the credit rating on the U.S. for the first time, the rating agency is suffering a downgrade among global investors as American bonds are proving world beaters -- undermining S&P’s mathematical assumptions -- and prompting disbelief among political scientists months after the company upgraded China because of the stability fostered by Communist Party rule.
At 9:30 the DJIA opened -90, the 10 yr note +3/32 at 2.30% and mortgage markets, choppy this morning, down 2/32 (.06 bp) at 9:30.
No growth in Germany in Q2, or in the euro zone overall. Germany's GDP rose 0.1% from the first quarter, when it jumped a revised 1.3%. Economists had forecast growth of 0.5%. A separate report today showed euro-area economic growth slowed in the second quarter more than economists had forecast. Gross domestic product in the 17-nation euro area rose 0.2% from the first quarter, when it increased 0.8%; estimates were for an increase of 0.3%. The German DAX declined to, the first decline in four days, on the soft economic data.
German chancellor Merkel and French Pres Sarkozy will meet later; according to press reports there will be no discussions regarding issuing euro bonds in an effort to shore up those debt ridden economies in the zone.
The wider look for US interest rates remains positive, but we are becoming concerned that the benchmark 10 yr note tested and failed to break below 2.00% last week; below 2.00% would be the lowest rate on the 10 yr note since back n the 50s. The 10 hit 2.00% back in 2008 as the sub prime crisis unfolded and took down Lehman Bros and others. It is less likely now that rates will fall much over the next couple of weeks as markets are likely to swing around with not much change until the Jackson Hole conference that begins August 26th.
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, August 16, 2011
Treasuries and mortgages started a little better this morning with the stock indexes trading lower, suggesting a weak opening at 9:30. Mortgage markets stalled here for the last few days with markets consolidating recent strong moves. The stock market put three consecutive days up or the best showing in weeks, this morning a little pullback on the open.
At 8:30 July housing starts were expected down 3,5% but declined just 1.5%; building permits were right on forecasts, down 3.2%. Housing still n depression and likely will continue to be well into next year. Housing starts so far this year are running on a 566,000 pace for all of 2011. The result compares with last year’s tally of 587,000 starts, the second-fewest on record. Home construction totaled 554,000 units in 2009, the lowest since record-keeping began in 1959. During the past decade’s housing boom, starts reached a peak of 2.07 million in 2005. (data frm Bloomberg)
July import prices were up 0.3% while US export prices declined 0.4%. Paying more for imports while earning less on exports. July imports followed a revised 0.6% drop in June.
At 9:15 July industrial production, expected +0.4%, increased 0.9%; July capacity utilization, expected at 77.0% frm 76.7% in June increased to 77.5%. Better than expectations pushed treasuries down a little and mortgages lower. The better reports on housing starts and industrial production and capacity utilization helped take some pressure off stock indexes which were down 100 points on the DJIA to -55.
Fitch out this morning affirming US credit rating at AAA; S&P lowered the US rating to AA2 and sent the stock market into a tail spin before recovering the last three days. S&P is feeling the pressure over its US downgrade. Eleven days after lowering the credit rating on the U.S. for the first time, the rating agency is suffering a downgrade among global investors as American bonds are proving world beaters -- undermining S&P’s mathematical assumptions -- and prompting disbelief among political scientists months after the company upgraded China because of the stability fostered by Communist Party rule.
At 9:30 the DJIA opened -90, the 10 yr note +3/32 at 2.30% and mortgage markets, choppy this morning, down 2/32 (.06 bp) at 9:30.
No growth in Germany in Q2, or in the euro zone overall. Germany's GDP rose 0.1% from the first quarter, when it jumped a revised 1.3%. Economists had forecast growth of 0.5%. A separate report today showed euro-area economic growth slowed in the second quarter more than economists had forecast. Gross domestic product in the 17-nation euro area rose 0.2% from the first quarter, when it increased 0.8%; estimates were for an increase of 0.3%. The German DAX declined to, the first decline in four days, on the soft economic data.
German chancellor Merkel and French Pres Sarkozy will meet later; according to press reports there will be no discussions regarding issuing euro bonds in an effort to shore up those debt ridden economies in the zone.
The wider look for US interest rates remains positive, but we are becoming concerned that the benchmark 10 yr note tested and failed to break below 2.00% last week; below 2.00% would be the lowest rate on the 10 yr note since back n the 50s. The 10 hit 2.00% back in 2008 as the sub prime crisis unfolded and took down Lehman Bros and others. It is less likely now that rates will fall much over the next couple of weeks as markets are likely to swing around with not much change until the Jackson Hole conference that begins August 26th.
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, August 16, 2011
Treasuries and mortgages started a little better this morning with the stock indexes trading lower, suggesting a weak opening at 9:30. Mortgage markets stalled here for the last few days with markets consolidating recent strong moves. The stock market put three consecutive days up or the best showing in weeks, this morning a little pullback on the open.
At 8:30 July housing starts were expected down 3,5% but declined just 1.5%; building permits were right on forecasts, down 3.2%. Housing still n depression and likely will continue to be well into next year. Housing starts so far this year are running on a 566,000 pace for all of 2011. The result compares with last year’s tally of 587,000 starts, the second-fewest on record. Home construction totaled 554,000 units in 2009, the lowest since record-keeping began in 1959. During the past decade’s housing boom, starts reached a peak of 2.07 million in 2005. (data frm Bloomberg)
July import prices were up 0.3% while US export prices declined 0.4%. Paying more for imports while earning less on exports. July imports followed a revised 0.6% drop in June.
At 9:15 July industrial production, expected +0.4%, increased 0.9%; July capacity utilization, expected at 77.0% frm 76.7% in June increased to 77.5%. Better than expectations pushed treasuries down a little and mortgages lower. The better reports on housing starts and industrial production and capacity utilization helped take some pressure off stock indexes which were down 100 points on the DJIA to -55.
Fitch out this morning affirming US credit rating at AAA; S&P lowered the US rating to AA2 and sent the stock market into a tail spin before recovering the last three days. S&P is feeling the pressure over its US downgrade. Eleven days after lowering the credit rating on the U.S. for the first time, the rating agency is suffering a downgrade among global investors as American bonds are proving world beaters -- undermining S&P’s mathematical assumptions -- and prompting disbelief among political scientists months after the company upgraded China because of the stability fostered by Communist Party rule.
At 9:30 the DJIA opened -90, the 10 yr note +3/32 at 2.30% and mortgage markets, choppy this morning, down 2/32 (.06 bp) at 9:30.
No growth in Germany in Q2, or in the euro zone overall. Germany's GDP rose 0.1% from the first quarter, when it jumped a revised 1.3%. Economists had forecast growth of 0.5%. A separate report today showed euro-area economic growth slowed in the second quarter more than economists had forecast. Gross domestic product in the 17-nation euro area rose 0.2% from the first quarter, when it increased 0.8%; estimates were for an increase of 0.3%. The German DAX declined to, the first decline in four days, on the soft economic data.
German chancellor Merkel and French Pres Sarkozy will meet later; according to press reports there will be no discussions regarding issuing euro bonds in an effort to shore up those debt ridden economies in the zone.
The wider look for US interest rates remains positive, but we are becoming concerned that the benchmark 10 yr note tested and failed to break below 2.00% last week; below 2.00% would be the lowest rate on the 10 yr note since back n the 50s. The 10 hit 2.00% back in 2008 as the sub prime crisis unfolded and took down Lehman Bros and others. It is less likely now that rates will fall much over the next couple of weeks as markets are likely to swing around with not much change until the Jackson Hole conference that begins August 26th.
Monday, August 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.
Monday, August 15, 2011
Prior to 8:30 treasuries and mortgages were a little weaker in price. At 8:30 the first data point this week, the NY Fed Empire State manufacturing index was expected to have declined to -0.4, as reported it fell to -7.72 frm -3.76 in July (any read under zero is considered contraction). New orders component fell to -7.82 frm -5.45, employment at 3.26 frm 1.11, and prices at 28.26 frm 43.33. The report didn't generate much reaction but kept interest rates in check until the stock market opened at 9:30. At 9:00 the DJIA index traded +41.
At 9:30 the DJIA opened +110, the 10 yr note unchanged at 2.26% while mortgage prices at 9:30 were soft; down 4/32 (.12 bp) on 30 yr conventionals and -11/32 (.34 bp) on 30 FHAs.
At 10:00 the August housing market index from NAHB, expected unchanged at 15, as reported 15; single family home sales index at 16, up from 15 in July. Treasuries and mortgages at 10:00 were losing ground from levels at 9:30. Mtgs at 10:00 -8/32 (.25 bp), the 10 yr at 10:00 -5/32.
Last Thursday and Friday the stock indexes closed better, it has been rare that the indexes improved on two successive days. This morning the stock market has opened better, talk will focus on possible 3 days in a row. The outlook for the economy is likely more pessimistic than it should be but in this panicky environment not many are thinking clearly. The economic outlook isn't what it was two months ago with report after report on the economy weaker than estimates. Mix in the still shocking statement from the Fed last Tuesday that it would keep the Fed funds rate at current levels for two more years; the take away is that the Fed now believes the US and global economies will not improve much and unemployment will stay at recession high levels.
This Week should continue to see increased volatility in the financial markets as investors and traders sift through the ever changing economic outlook. Last week didn't have much in the way of key data points, this week we have a lot of economic food to digest. The bond and mortgage markets remain technically overbought but in this present environment of high volatility and moving to safety the bond market will likely continue to hold low rates, however not quite as low as it was last week. It all depends on the data this week. Expect to hear more about the possibility of another Fed easing (QE 3); whether or not the Fed goes back to purchasing treasuries or MBSs or anything else, it won't likely have any impact on improving the economy or job growth. This week expect another week of interday market volatility. The bond and mortgage markets will continue to move in tandem with stock indexes; better stock market lower prices in mortgages and treasuries.
This week's Economic Calendar:
Monday;
8:30 August Empire State manufacturing index (as reported -7.72 frm -3.76 in July)
10:00 Aug NAHB housing mkt index (expected at 15, as reported
Tuesday;
8:30 am July housing starts (-3.5%)
July building permits (-3.0%)
July export prices
July import prices
9:15 am July industrial production (+0.4%)
July capacity utilization (77.0% frm 76.7% in June)
Wednesday;
7:00 am Weekly MBA mortgage applications
8:30 am July producer price index (0.0% frm -0.4% in June; ex food and energy +0.2%)
Thursday;
8:30 am weekly jobless claims (+5K to 400K; continues claims 3.698 mil frm 3.688 mil)
July consumer price index (+0.2%, ex food and energy +0.2%)
10:00 am July existing home sales (+2.0% at 4.87 mil)
August Philadelphia Fed business index (+1.0 frm +3.20 in July)
July leading economic indicators (+0.2%)
Japan’s economy shrank at an annualized 1.3% rate in the second quarter, compared with the median forecast for a 2.5% drop. Oil traded near its highest in a week as advancing U.S. equity futures and better-than-forecast economic data from Japan allayed concerns that the global recovery has faded. When is bad news good news? These days with markets increasingly worried about a double dip recessions any report that beats estimates is reason for a sigh of relief.
Yields are little changed across Europe as markets take a wait and see approach ahead of tomorrow's crisis management meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel. The little change is somewhat of a surprise as initial reports are suggesting that both France and Germany have ruled out a common Euro zone bond. German Bunds and UK Gilts are seeing some light buying with German yields lower by as much as 5 bps and Gilts off 1 to 2 bps. The 10-yr Bund is now yielding 2.322% while the 10-yr Gilt is near 2.520%.
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, August 15, 2011
Prior to 8:30 treasuries and mortgages were a little weaker in price. At 8:30 the first data point this week, the NY Fed Empire State manufacturing index was expected to have declined to -0.4, as reported it fell to -7.72 frm -3.76 in July (any read under zero is considered contraction). New orders component fell to -7.82 frm -5.45, employment at 3.26 frm 1.11, and prices at 28.26 frm 43.33. The report didn't generate much reaction but kept interest rates in check until the stock market opened at 9:30. At 9:00 the DJIA index traded +41.
At 9:30 the DJIA opened +110, the 10 yr note unchanged at 2.26% while mortgage prices at 9:30 were soft; down 4/32 (.12 bp) on 30 yr conventionals and -11/32 (.34 bp) on 30 FHAs.
At 10:00 the August housing market index from NAHB, expected unchanged at 15, as reported 15; single family home sales index at 16, up from 15 in July. Treasuries and mortgages at 10:00 were losing ground from levels at 9:30. Mtgs at 10:00 -8/32 (.25 bp), the 10 yr at 10:00 -5/32.
Last Thursday and Friday the stock indexes closed better, it has been rare that the indexes improved on two successive days. This morning the stock market has opened better, talk will focus on possible 3 days in a row. The outlook for the economy is likely more pessimistic than it should be but in this panicky environment not many are thinking clearly. The economic outlook isn't what it was two months ago with report after report on the economy weaker than estimates. Mix in the still shocking statement from the Fed last Tuesday that it would keep the Fed funds rate at current levels for two more years; the take away is that the Fed now believes the US and global economies will not improve much and unemployment will stay at recession high levels.
This Week should continue to see increased volatility in the financial markets as investors and traders sift through the ever changing economic outlook. Last week didn't have much in the way of key data points, this week we have a lot of economic food to digest. The bond and mortgage markets remain technically overbought but in this present environment of high volatility and moving to safety the bond market will likely continue to hold low rates, however not quite as low as it was last week. It all depends on the data this week. Expect to hear more about the possibility of another Fed easing (QE 3); whether or not the Fed goes back to purchasing treasuries or MBSs or anything else, it won't likely have any impact on improving the economy or job growth. This week expect another week of interday market volatility. The bond and mortgage markets will continue to move in tandem with stock indexes; better stock market lower prices in mortgages and treasuries.
This week's Economic Calendar:
Monday;
8:30 August Empire State manufacturing index (as reported -7.72 frm -3.76 in July)
10:00 Aug NAHB housing mkt index (expected at 15, as reported
Tuesday;
8:30 am July housing starts (-3.5%)
July building permits (-3.0%)
July export prices
July import prices
9:15 am July industrial production (+0.4%)
July capacity utilization (77.0% frm 76.7% in June)
Wednesday;
7:00 am Weekly MBA mortgage applications
8:30 am July producer price index (0.0% frm -0.4% in June; ex food and energy +0.2%)
Thursday;
8:30 am weekly jobless claims (+5K to 400K; continues claims 3.698 mil frm 3.688 mil)
July consumer price index (+0.2%, ex food and energy +0.2%)
10:00 am July existing home sales (+2.0% at 4.87 mil)
August Philadelphia Fed business index (+1.0 frm +3.20 in July)
July leading economic indicators (+0.2%)
Japan’s economy shrank at an annualized 1.3% rate in the second quarter, compared with the median forecast for a 2.5% drop. Oil traded near its highest in a week as advancing U.S. equity futures and better-than-forecast economic data from Japan allayed concerns that the global recovery has faded. When is bad news good news? These days with markets increasingly worried about a double dip recessions any report that beats estimates is reason for a sigh of relief.
Yields are little changed across Europe as markets take a wait and see approach ahead of tomorrow's crisis management meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel. The little change is somewhat of a surprise as initial reports are suggesting that both France and Germany have ruled out a common Euro zone bond. German Bunds and UK Gilts are seeing some light buying with German yields lower by as much as 5 bps and Gilts off 1 to 2 bps. The 10-yr Bund is now yielding 2.322% while the 10-yr Gilt is near 2.520%.
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, August 15, 2011
Prior to 8:30 treasuries and mortgages were a little weaker in price. At 8:30 the first data point this week, the NY Fed Empire State manufacturing index was expected to have declined to -0.4, as reported it fell to -7.72 frm -3.76 in July (any read under zero is considered contraction). New orders component fell to -7.82 frm -5.45, employment at 3.26 frm 1.11, and prices at 28.26 frm 43.33. The report didn't generate much reaction but kept interest rates in check until the stock market opened at 9:30. At 9:00 the DJIA index traded +41.
At 9:30 the DJIA opened +110, the 10 yr note unchanged at 2.26% while mortgage prices at 9:30 were soft; down 4/32 (.12 bp) on 30 yr conventionals and -11/32 (.34 bp) on 30 FHAs.
At 10:00 the August housing market index from NAHB, expected unchanged at 15, as reported 15; single family home sales index at 16, up from 15 in July. Treasuries and mortgages at 10:00 were losing ground from levels at 9:30. Mtgs at 10:00 -8/32 (.25 bp), the 10 yr at 10:00 -5/32.
Last Thursday and Friday the stock indexes closed better, it has been rare that the indexes improved on two successive days. This morning the stock market has opened better, talk will focus on possible 3 days in a row. The outlook for the economy is likely more pessimistic than it should be but in this panicky environment not many are thinking clearly. The economic outlook isn't what it was two months ago with report after report on the economy weaker than estimates. Mix in the still shocking statement from the Fed last Tuesday that it would keep the Fed funds rate at current levels for two more years; the take away is that the Fed now believes the US and global economies will not improve much and unemployment will stay at recession high levels.
This Week should continue to see increased volatility in the financial markets as investors and traders sift through the ever changing economic outlook. Last week didn't have much in the way of key data points, this week we have a lot of economic food to digest. The bond and mortgage markets remain technically overbought but in this present environment of high volatility and moving to safety the bond market will likely continue to hold low rates, however not quite as low as it was last week. It all depends on the data this week. Expect to hear more about the possibility of another Fed easing (QE 3); whether or not the Fed goes back to purchasing treasuries or MBSs or anything else, it won't likely have any impact on improving the economy or job growth. This week expect another week of interday market volatility. The bond and mortgage markets will continue to move in tandem with stock indexes; better stock market lower prices in mortgages and treasuries.
This week's Economic Calendar:
Monday;
8:30 August Empire State manufacturing index (as reported -7.72 frm -3.76 in July)
10:00 Aug NAHB housing mkt index (expected at 15, as reported
Tuesday;
8:30 am July housing starts (-3.5%)
July building permits (-3.0%)
July export prices
July import prices
9:15 am July industrial production (+0.4%)
July capacity utilization (77.0% frm 76.7% in June)
Wednesday;
7:00 am Weekly MBA mortgage applications
8:30 am July producer price index (0.0% frm -0.4% in June; ex food and energy +0.2%)
Thursday;
8:30 am weekly jobless claims (+5K to 400K; continues claims 3.698 mil frm 3.688 mil)
July consumer price index (+0.2%, ex food and energy +0.2%)
10:00 am July existing home sales (+2.0% at 4.87 mil)
August Philadelphia Fed business index (+1.0 frm +3.20 in July)
July leading economic indicators (+0.2%)
Japan’s economy shrank at an annualized 1.3% rate in the second quarter, compared with the median forecast for a 2.5% drop. Oil traded near its highest in a week as advancing U.S. equity futures and better-than-forecast economic data from Japan allayed concerns that the global recovery has faded. When is bad news good news? These days with markets increasingly worried about a double dip recessions any report that beats estimates is reason for a sigh of relief.
Yields are little changed across Europe as markets take a wait and see approach ahead of tomorrow's crisis management meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel. The little change is somewhat of a surprise as initial reports are suggesting that both France and Germany have ruled out a common Euro zone bond. German Bunds and UK Gilts are seeing some light buying with German yields lower by as much as 5 bps and Gilts off 1 to 2 bps. The 10-yr Bund is now yielding 2.322% while the 10-yr Gilt is near 2.520%.
Friday, August 12, 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, August 12, 2011
Rate markets a little better this morning after heavy selling yesterday took mortgage prices down 41/32 (128 bp). The see saw continues in the stock market, down one day hard, up strong the next day; uncertainty still rules markets. Yesterday the stock indexes jumped 423 (DJIA) after dumping 520 on Wednesday; this morning the key indexes are actually better. Can we have two up days in a row? We will have to wait until the close to see, the volatility remains extreme and not possible to predict where markets will trade the next five minutes let alone for the next six hours.
At 8:30 July retail sales were up 0.5% overall and up 0.5% when auto sales are extracted; a little better than forecasts on the ex autos sales. June retail sales, originally reported up a very weak 0.1% were revised to +0.3%. There was no noticeable reaction to it. Sales in July were the best in four months suggesting consumers, while conservative, are still buying.
At 9:30 the DJIA opened up 90, the 10 yr note at 2.28% -5 bp and mortgage prices +16/32 (.50 bp) frm yesterday's close.
At 9:55 the U. of Michigan mid-month consumer sentiment index, expected at 63.0 frm 63.7 at the end of July, tumbled to 54.9, the lowest index read since May 1980. The current conditions component fell to 69.3 frm 75.8 and the 12 month outlook index fell to 40 frm 55. A very weak report that has pushed mortgage prices higher from 9:30 and took some wind out of the stock indexes although still holding gains. Not really much of surprise given the current economic outlook and consumer anger over Was
At 10:00 June business inventories expected up 0.6%, were up 0.3%; sales up 0.4%leaving a 1.28 month supply unchanged from May.
This morning France reported its quarterly GDP at zero, no growth. More evidence that Europe's economies are softening just as we have here. European industrial production unexpectedly fell in June, it fell 0.7% from May. European economic confidence weakened in July and manufacturing growth slowed, based on a survey of purchasing managers. Euro-region growth probably weakened in the second quarter from 0.8% in the previous three months, European Central Bank President Jean-Claude Trichet said on Aug. 4. In the year, the economy may expand about 1.9% before cooling to 1.7% in 2012.
Turkey, Greece and South Korea trying to stem the heavy selling in equity markets have banned short sales. The take away is that by doing so the volatility will lessen and remove some of the panic. Likely the bans have helped our market in early trade this morning. Banning shot sales has never really worked before where it has been implemented, but the initial reaction generally does slow it down. In the longer perspective the markets will go where investors want it to go, based on underlying fundamentals.
Renewed talk this morning that most economists are now expecting another QE move from the Fed. If the Fed does another easing move it isn't likely to increase employment anytime soon. The advantage, and possibly the logic in another easing, is that the Fed could drive long term rates even lower and push mortgage rates down to levels never seen before. Doing so would likely keep re-financing going, lowering debt service for consumers thus increasing consumer spending. Taking it further, if consumers increase spending the hope is that businesses will increase hiring. From my perspective, driving rates lower won't meet the expectations; homeowners will take advantage of it but won't open purses for much increase in discretionary spending. Until consumer confidence increases about our leadership in this country, consumers rightly will continue to be cautious. New polls out show citizens have very little confidence in Washington, Republicans, Democrats and Pres Obama. After the embarrassing performance over the debt ceiling America is fed up. Any QE move from the Fed will likely be announced on August 26th at Jackson Hole.
The mortgage market is continuing to exhibit extreme day to day volatility. Mortgage rates will stay low with the Fed intent on keeping rates down, however until the 10 yr treasury note falls below 2.00% (now 2.27%) prices in the mortgage markets will continue to trade in wide interday swings. The bond and mortgage markets are still technically overbought, that may keep mortgage rates vulnerable for awhile. The wider perspective remains bullish, the near term outlook is for continued choppy trading.
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, August 12, 2011
Rate markets a little better this morning after heavy selling yesterday took mortgage prices down 41/32 (128 bp). The see saw continues in the stock market, down one day hard, up strong the next day; uncertainty still rules markets. Yesterday the stock indexes jumped 423 (DJIA) after dumping 520 on Wednesday; this morning the key indexes are actually better. Can we have two up days in a row? We will have to wait until the close to see, the volatility remains extreme and not possible to predict where markets will trade the next five minutes let alone for the next six hours.
At 8:30 July retail sales were up 0.5% overall and up 0.5% when auto sales are extracted; a little better than forecasts on the ex autos sales. June retail sales, originally reported up a very weak 0.1% were revised to +0.3%. There was no noticeable reaction to it. Sales in July were the best in four months suggesting consumers, while conservative, are still buying.
At 9:30 the DJIA opened up 90, the 10 yr note at 2.28% -5 bp and mortgage prices +16/32 (.50 bp) frm yesterday's close.
At 9:55 the U. of Michigan mid-month consumer sentiment index, expected at 63.0 frm 63.7 at the end of July, tumbled to 54.9, the lowest index read since May 1980. The current conditions component fell to 69.3 frm 75.8 and the 12 month outlook index fell to 40 frm 55. A very weak report that has pushed mortgage prices higher from 9:30 and took some wind out of the stock indexes although still holding gains. Not really much of surprise given the current economic outlook and consumer anger over Was
At 10:00 June business inventories expected up 0.6%, were up 0.3%; sales up 0.4%leaving a 1.28 month supply unchanged from May.
This morning France reported its quarterly GDP at zero, no growth. More evidence that Europe's economies are softening just as we have here. European industrial production unexpectedly fell in June, it fell 0.7% from May. European economic confidence weakened in July and manufacturing growth slowed, based on a survey of purchasing managers. Euro-region growth probably weakened in the second quarter from 0.8% in the previous three months, European Central Bank President Jean-Claude Trichet said on Aug. 4. In the year, the economy may expand about 1.9% before cooling to 1.7% in 2012.
Turkey, Greece and South Korea trying to stem the heavy selling in equity markets have banned short sales. The take away is that by doing so the volatility will lessen and remove some of the panic. Likely the bans have helped our market in early trade this morning. Banning shot sales has never really worked before where it has been implemented, but the initial reaction generally does slow it down. In the longer perspective the markets will go where investors want it to go, based on underlying fundamentals.
Renewed talk this morning that most economists are now expecting another QE move from the Fed. If the Fed does another easing move it isn't likely to increase employment anytime soon. The advantage, and possibly the logic in another easing, is that the Fed could drive long term rates even lower and push mortgage rates down to levels never seen before. Doing so would likely keep re-financing going, lowering debt service for consumers thus increasing consumer spending. Taking it further, if consumers increase spending the hope is that businesses will increase hiring. From my perspective, driving rates lower won't meet the expectations; homeowners will take advantage of it but won't open purses for much increase in discretionary spending. Until consumer confidence increases about our leadership in this country, consumers rightly will continue to be cautious. New polls out show citizens have very little confidence in Washington, Republicans, Democrats and Pres Obama. After the embarrassing performance over the debt ceiling America is fed up. Any QE move from the Fed will likely be announced on August 26th at Jackson Hole.
The mortgage market is continuing to exhibit extreme day to day volatility. Mortgage rates will stay low with the Fed intent on keeping rates down, however until the 10 yr treasury note falls below 2.00% (now 2.27%) prices in the mortgage markets will continue to trade in wide interday swings. The bond and mortgage markets are still technically overbought, that may keep mortgage rates vulnerable for awhile. The wider perspective remains bullish, the near term outlook is for continued choppy trading.
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, August 12, 2011
Rate markets a little better this morning after heavy selling yesterday took mortgage prices down 41/32 (128 bp). The see saw continues in the stock market, down one day hard, up strong the next day; uncertainty still rules markets. Yesterday the stock indexes jumped 423 (DJIA) after dumping 520 on Wednesday; this morning the key indexes are actually better. Can we have two up days in a row? We will have to wait until the close to see, the volatility remains extreme and not possible to predict where markets will trade the next five minutes let alone for the next six hours.
At 8:30 July retail sales were up 0.5% overall and up 0.5% when auto sales are extracted; a little better than forecasts on the ex autos sales. June retail sales, originally reported up a very weak 0.1% were revised to +0.3%. There was no noticeable reaction to it. Sales in July were the best in four months suggesting consumers, while conservative, are still buying.
At 9:30 the DJIA opened up 90, the 10 yr note at 2.28% -5 bp and mortgage prices +16/32 (.50 bp) frm yesterday's close.
At 9:55 the U. of Michigan mid-month consumer sentiment index, expected at 63.0 frm 63.7 at the end of July, tumbled to 54.9, the lowest index read since May 1980. The current conditions component fell to 69.3 frm 75.8 and the 12 month outlook index fell to 40 frm 55. A very weak report that has pushed mortgage prices higher from 9:30 and took some wind out of the stock indexes although still holding gains. Not really much of surprise given the current economic outlook and consumer anger over Was
At 10:00 June business inventories expected up 0.6%, were up 0.3%; sales up 0.4%leaving a 1.28 month supply unchanged from May.
This morning France reported its quarterly GDP at zero, no growth. More evidence that Europe's economies are softening just as we have here. European industrial production unexpectedly fell in June, it fell 0.7% from May. European economic confidence weakened in July and manufacturing growth slowed, based on a survey of purchasing managers. Euro-region growth probably weakened in the second quarter from 0.8% in the previous three months, European Central Bank President Jean-Claude Trichet said on Aug. 4. In the year, the economy may expand about 1.9% before cooling to 1.7% in 2012.
Turkey, Greece and South Korea trying to stem the heavy selling in equity markets have banned short sales. The take away is that by doing so the volatility will lessen and remove some of the panic. Likely the bans have helped our market in early trade this morning. Banning shot sales has never really worked before where it has been implemented, but the initial reaction generally does slow it down. In the longer perspective the markets will go where investors want it to go, based on underlying fundamentals.
Renewed talk this morning that most economists are now expecting another QE move from the Fed. If the Fed does another easing move it isn't likely to increase employment anytime soon. The advantage, and possibly the logic in another easing, is that the Fed could drive long term rates even lower and push mortgage rates down to levels never seen before. Doing so would likely keep re-financing going, lowering debt service for consumers thus increasing consumer spending. Taking it further, if consumers increase spending the hope is that businesses will increase hiring. From my perspective, driving rates lower won't meet the expectations; homeowners will take advantage of it but won't open purses for much increase in discretionary spending. Until consumer confidence increases about our leadership in this country, consumers rightly will continue to be cautious. New polls out show citizens have very little confidence in Washington, Republicans, Democrats and Pres Obama. After the embarrassing performance over the debt ceiling America is fed up. Any QE move from the Fed will likely be announced on August 26th at Jackson Hole.
The mortgage market is continuing to exhibit extreme day to day volatility. Mortgage rates will stay low with the Fed intent on keeping rates down, however until the 10 yr treasury note falls below 2.00% (now 2.27%) prices in the mortgage markets will continue to trade in wide interday swings. The bond and mortgage markets are still technically overbought, that may keep mortgage rates vulnerable for awhile. The wider perspective remains bullish, the near term outlook is for continued choppy trading.
Thursday, August 11, 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, August 11, 2011
Early this morning, prior to 8:30 interest rate markets were somewhat better; at 8:30 weekly jobless claims were better than expected. Claims fell 7K to 395K to a four-month low, signaling the recent slowdown in payroll gains is due to a lack of hiring rather than more firings. Continuing claims fell to 3.688 mil frm 3.748 mil last week. Although claims were better they are still weak but after the serious beatdown of stocks recently and the big decline in rates markets it was enough to stop selling. The mortgage markets continue to be exceptionally volatile, at 9:00 mtg prices down 10/32 (.31 bp). Yesterday MBS markets were swinging back and forth in rapid fashion, one of the most volatile days in mortgage markets in over a year.
The stock market is way oversold based on technicals and psychological readings; the rate markets are equally overbought. Taking any positions in these markets has been risky, this morning the DJIA at 8:00 was down 130 points, at 9:15 +45; mortgage prices at 8:30 +5/32 (.15 bp) at 9:15 -11/32 (.34 bp).
News coming out of Europe has helped the US equity markets a little so far this morning. The NY Times is reporting regulators in Europe are considering barring any short sales in the various stock markets and shorting financial stocks. No solid info yet but when the report hit the wires it did boost stock index trading in pre-market futures. Turkey moved to curb short sales and threatened “severe penalties” for stock manipulation, joining nations from Greece to South Korea in trying to stem bearish bets after the worst tumble in global shares since 2008.
The June Treasury budget balance out at 8:30 was monthly deficit of $53.1B, markets were expecting -$48.0B. It is the highest level since October 2008 as a slump in exports exceeded a decline in shipments from overseas. Red ink continues at record levels while our leaders seem to be living in a fog and apparently do not get it yet.
At 9:30 the DJIA opened +123, the 10 yr note -7/32 at 2,20% +3 bp and mortgage markets, very volatile so far this morning down 11/32 (.34 bp). Prices of MBSs this morning are moving in 4/32 to 10/32 swings from minute to minute, difficult to say just how various lenders priced this morning.
At 1:00 this afternoon Treasury will complete the quarterly refunding with $16B of 30 yr bonds up for sale. The 10 and 3 yr auctions both were very well bid, the 30 should also see strong bidding.
Extreme volatility continuing this morning led by the stock indexes. The US bond market, based on the bellwether 10 yr note is ripe for a retracement as is the stock market. Recent activity has been based on panic and short selling by savvy traders and some hedge funds. The 10 yr hit 2.08% yesterday before closing at 2.16%; since back in the late 40s and early 50s the low yield for the 10 yr has been 2.03% hit in Dec 2008. The rate market is unlikely to push below 2.00% on the 10 yr without some consolidation at present to higher levels. Mortgage rates are also likely to settle down here for a few days. There are no bulls now in stock markets, no bears in the bond market; a perfect set up for rebounds in both markets, although the wider perspective will remain bearish on the economic outlook and bullish for rates, but lower rates from here may be a struggle for awhile. Markets have to settle down now, we expect they will. Lenders are likely to continue defensive pricing, concerns that product locked at prices a week ago may not close is a problem not having much confidence on closings as rates have crashed lower over the past two weeks.
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, August 11, 2011
Early this morning, prior to 8:30 interest rate markets were somewhat better; at 8:30 weekly jobless claims were better than expected. Claims fell 7K to 395K to a four-month low, signaling the recent slowdown in payroll gains is due to a lack of hiring rather than more firings. Continuing claims fell to 3.688 mil frm 3.748 mil last week. Although claims were better they are still weak but after the serious beatdown of stocks recently and the big decline in rates markets it was enough to stop selling. The mortgage markets continue to be exceptionally volatile, at 9:00 mtg prices down 10/32 (.31 bp). Yesterday MBS markets were swinging back and forth in rapid fashion, one of the most volatile days in mortgage markets in over a year.
The stock market is way oversold based on technicals and psychological readings; the rate markets are equally overbought. Taking any positions in these markets has been risky, this morning the DJIA at 8:00 was down 130 points, at 9:15 +45; mortgage prices at 8:30 +5/32 (.15 bp) at 9:15 -11/32 (.34 bp).
News coming out of Europe has helped the US equity markets a little so far this morning. The NY Times is reporting regulators in Europe are considering barring any short sales in the various stock markets and shorting financial stocks. No solid info yet but when the report hit the wires it did boost stock index trading in pre-market futures. Turkey moved to curb short sales and threatened “severe penalties” for stock manipulation, joining nations from Greece to South Korea in trying to stem bearish bets after the worst tumble in global shares since 2008.
The June Treasury budget balance out at 8:30 was monthly deficit of $53.1B, markets were expecting -$48.0B. It is the highest level since October 2008 as a slump in exports exceeded a decline in shipments from overseas. Red ink continues at record levels while our leaders seem to be living in a fog and apparently do not get it yet.
At 9:30 the DJIA opened +123, the 10 yr note -7/32 at 2,20% +3 bp and mortgage markets, very volatile so far this morning down 11/32 (.34 bp). Prices of MBSs this morning are moving in 4/32 to 10/32 swings from minute to minute, difficult to say just how various lenders priced this morning.
At 1:00 this afternoon Treasury will complete the quarterly refunding with $16B of 30 yr bonds up for sale. The 10 and 3 yr auctions both were very well bid, the 30 should also see strong bidding.
Extreme volatility continuing this morning led by the stock indexes. The US bond market, based on the bellwether 10 yr note is ripe for a retracement as is the stock market. Recent activity has been based on panic and short selling by savvy traders and some hedge funds. The 10 yr hit 2.08% yesterday before closing at 2.16%; since back in the late 40s and early 50s the low yield for the 10 yr has been 2.03% hit in Dec 2008. The rate market is unlikely to push below 2.00% on the 10 yr without some consolidation at present to higher levels. Mortgage rates are also likely to settle down here for a few days. There are no bulls now in stock markets, no bears in the bond market; a perfect set up for rebounds in both markets, although the wider perspective will remain bearish on the economic outlook and bullish for rates, but lower rates from here may be a struggle for awhile. Markets have to settle down now, we expect they will. Lenders are likely to continue defensive pricing, concerns that product locked at prices a week ago may not close is a problem not having much confidence on closings as rates have crashed lower over the past two weeks.
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, August 11, 2011
Early this morning, prior to 8:30 interest rate markets were somewhat better; at 8:30 weekly jobless claims were better than expected. Claims fell 7K to 395K to a four-month low, signaling the recent slowdown in payroll gains is due to a lack of hiring rather than more firings. Continuing claims fell to 3.688 mil frm 3.748 mil last week. Although claims were better they are still weak but after the serious beatdown of stocks recently and the big decline in rates markets it was enough to stop selling. The mortgage markets continue to be exceptionally volatile, at 9:00 mtg prices down 10/32 (.31 bp). Yesterday MBS markets were swinging back and forth in rapid fashion, one of the most volatile days in mortgage markets in over a year.
The stock market is way oversold based on technicals and psychological readings; the rate markets are equally overbought. Taking any positions in these markets has been risky, this morning the DJIA at 8:00 was down 130 points, at 9:15 +45; mortgage prices at 8:30 +5/32 (.15 bp) at 9:15 -11/32 (.34 bp).
News coming out of Europe has helped the US equity markets a little so far this morning. The NY Times is reporting regulators in Europe are considering barring any short sales in the various stock markets and shorting financial stocks. No solid info yet but when the report hit the wires it did boost stock index trading in pre-market futures. Turkey moved to curb short sales and threatened “severe penalties” for stock manipulation, joining nations from Greece to South Korea in trying to stem bearish bets after the worst tumble in global shares since 2008.
The June Treasury budget balance out at 8:30 was monthly deficit of $53.1B, markets were expecting -$48.0B. It is the highest level since October 2008 as a slump in exports exceeded a decline in shipments from overseas. Red ink continues at record levels while our leaders seem to be living in a fog and apparently do not get it yet.
At 9:30 the DJIA opened +123, the 10 yr note -7/32 at 2,20% +3 bp and mortgage markets, very volatile so far this morning down 11/32 (.34 bp). Prices of MBSs this morning are moving in 4/32 to 10/32 swings from minute to minute, difficult to say just how various lenders priced this morning.
At 1:00 this afternoon Treasury will complete the quarterly refunding with $16B of 30 yr bonds up for sale. The 10 and 3 yr auctions both were very well bid, the 30 should also see strong bidding.
Extreme volatility continuing this morning led by the stock indexes. The US bond market, based on the bellwether 10 yr note is ripe for a retracement as is the stock market. Recent activity has been based on panic and short selling by savvy traders and some hedge funds. The 10 yr hit 2.08% yesterday before closing at 2.16%; since back in the late 40s and early 50s the low yield for the 10 yr has been 2.03% hit in Dec 2008. The rate market is unlikely to push below 2.00% on the 10 yr without some consolidation at present to higher levels. Mortgage rates are also likely to settle down here for a few days. There are no bulls now in stock markets, no bears in the bond market; a perfect set up for rebounds in both markets, although the wider perspective will remain bearish on the economic outlook and bullish for rates, but lower rates from here may be a struggle for awhile. Markets have to settle down now, we expect they will. Lenders are likely to continue defensive pricing, concerns that product locked at prices a week ago may not close is a problem not having much confidence on closings as rates have crashed lower over the past two weeks.
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