Mortgage Rates

Mortgage Rates Anthony Hood Equity Investment Capital Office: 949-891-0067 Email: tony@equityinvestmentcapital.com website: www.equityinvestmentcapital.com At 8:15 the ADP said non-farm jobs increased 162K, estimates were for 140K. The 162,000 increase in employment followed a revised 189,000 jump in August which was originally reported at +201K. Over the two years ended August, ADP’s initial release has understated or overstated the Labor Department’s initial private payroll figure by an average of 66,000. Goods-producing industries, which include manufacturers and construction companies, increased workers by 18,000. Construction employment rose by 10,000, while factories employment climbed 4,000. Service providers added 144,000 workers. Companies employing more than 499 workers increased payrolls by 17,000 jobs. Medium-sized businesses, with 50 to 499 employees, added 64,000, and small companies added 81,000, ADP said. The reaction to report was not much in the bond and mortgage markets but stock index futures gained a little from levels prior to the release. Although better than expected, ADP takes a back seat to the BLS employment data that will come on Friday. Estimates for the BLS data; non-farm job growth 115K, non-farm private jobs +130K with the unemployment rate unchanged from last month at 8.0%; (the unemployment rate is actually higher, probably close to 10% if those that have stopped looking for a job were included). At 9:30 the DJIA opened +15, NASDAQ +9, S&P +3. The 10 yr note at 1.63% +1 bp with 30 yr MBS price -5 bp after being up 5 bp earlier. At 10:00 Sept ISM services sector index expected at 53.0 frm 53.7 in August, the index increased to 55.1 the highest reading since last March; new orders component increased to 57.7 but the employment component fell to 53.1 frm 53.8 (0ver 50 is considered expansion. There was little reaction to better report in the bond market, mortgage market or the stock market with the employment report on Friday, markets are likely to sit quietly until then. Services industries from Asia to Europe cooled last month after the euro-area debt crisis pulled economies including Spain and Italy into recession and damped global growth prospects. The purchasing managers’ index fell to 53.7 in September from 56.3 in August, the National Bureau of Statistics and China Federation of Logistics and Purchasing in Beijing said today. That’s the lowest since at least March 2011. In the euro-area, a gauge slipped to 46.1 last month from 47.2 and a U.K. measure also fell. In Germany, the region’s largest economy, France and Italy, the services indicators were all below 50 last month. The gauge for Spain dropped to 40.2 from 44. Readings below 50 indicate contraction, similar to the ISM data. Europe is now back in recession. Early this morning the weekly MBA mortgage applications data; overall apps increased 16.6% frm the previous week. Refinance apps exploded up 20.0% while purchase apps +4.0%. Low mortgage rates driving apps. Rates across products are all at record lows with 30-year conforming mortgages ($417,500 or less) down 10 basis points in the week to 3.53%. Signs of a turnaround in the real estate market are contributing to consumer optimism. Home prices in the second quarter rose by 2.2% from the previous three months, the best performance since the fourth quarter of 2005, according to S&P/Case-Shiller data released last week. There is a law on the books that requires businesses to issue potential lay-off notices to employees 60 days before they are laid off. The law, designed to remove the shock of layoffs. Now with the election coming the Office of Management and Budget has asked Lockheed not to issue the notice to lay off 123K employees due to mandated defense cuts that were mandated by Congress. Lockheed says it may have to lay off that many due to cuts. If the company doesn’t issue the notices 60 days prior it will have to wait, which will cost the company huge amounts of money to wait another month. Well, the Office of Management and Budget is telling Lockheed it will repay the company if it holds off.