Mortgage Rate Update
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Tuesday, September 6, 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, September 06, 2011
This Week; there isn't much in the way of key economic data. The week is all focused on Thursday evening when the President will speak to a joint session of Congress to lay out his plans to create jobs. Yes, it will be interesting but it will be mostly political, chiding Republicans to get on board his plan what ever it might be. In the meantime the economy is continuing to slide; no new jobs created in August rocked the markets last Friday. Likely the President will announce a lot of construction jobs such as bridges, airports and roads since they can be up and running quickly. Unlikely he will ever use the phrase "shovel-ready" again since his last attempt to increase jobs that were "shovel-ready" turned out to be a dud. It will require more spending, how will that go down with conservatives? Not well. Consensus among pundits is that his speech will be the foundation of his agenda for the economic recovery that will set the tone for next year.
Over the weekend foreign equity markets were hit hard. The 10-yr yield to a record low 1.911%. A flight to safety in response to Monday's sell off in equity markets around the world was reversed after the Swiss National Bank took drastic measures, announcing a peg of 1.20 euro per 1 franc (trading at 1.10 pre-announcement). At 8:30 this morning the 10 yr traded at 1.94%. Mortgage markets will likely drag along but won't move as much as rates fall as treasuries. At 8:30 the 10 yr note +14/32, mortgage prices -3/32.
The increasing view is that the Fed will do another easing by increasing its balance sheet with longer dated maturities while selling shorted dated notes. Mostly talk so far but we hear it coming from many different sources. Markets are the measuring stick and traders are anticipating the move. In the last couple of days the 10 yr note and 30 yr bond yields declined while the middle of the curve (5 yr note) has remained generally unchanged and the 2 yr note actually increased in rate. If that will be the Fed's easing plan, will it get businesses to spend and hire, will it jump start home buying, will it support job growth? There will be no place to go to earn any return on cash; the stock market isn't going to improve if employment remains stagnant, can't park money in the bond markets, the 30 yr bond has fallen 37 bp in the last two weeks---maybe some corporates, but not much; gold will likely continue higher as investors scramble for any kind of return. Commodities may increase but again without economic growth there is a limit on how much higher prices will go. The Federal Reserve is essentially out of bullets; from now on it is up to fiscal policies (Congress and the Administration).
At 9:30 the DJIA opened down 210 points, the 10 yr note +16/32 at 1.94% -6 bp; mortgage prices +1/32 (.03 p). By 9:35 the DJIA down 270, NASDAQ -58 and the S&P -28.
At 10:00 the August ISM services sector index, expected at 51.0 frm 52.7 in July, was at 53.3. The components; new orders 52.8 frm 51.7, employment 51.6 frm 52.5 and prices pd at 64.2 frm 56.6. Not much reaction to the slightly better data on services. Although better the services sector is still generally flat based on the data. Prices pd did increase, the first increase in many weeks. No recession based on the data but no real growth either.
This Week's Economic Calendar:
Wednesday;
7:00 am weekly MBA mortgage applications
2:00 pm Fed Beige Book
Thursday;
8:30 am weekly jobless claims (-9K to 400K; con't clams 3.70 mil from 3.735 mil last week)
July US trade balance (-$51.5B)
3:00 pm July consumer credit (+$5.0B)
8:00 pm President Obama's speech
Friday;
10:00 am July wholesale inventories (+0.7%)
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, September 06, 2011
This Week; there isn't much in the way of key economic data. The week is all focused on Thursday evening when the President will speak to a joint session of Congress to lay out his plans to create jobs. Yes, it will be interesting but it will be mostly political, chiding Republicans to get on board his plan what ever it might be. In the meantime the economy is continuing to slide; no new jobs created in August rocked the markets last Friday. Likely the President will announce a lot of construction jobs such as bridges, airports and roads since they can be up and running quickly. Unlikely he will ever use the phrase "shovel-ready" again since his last attempt to increase jobs that were "shovel-ready" turned out to be a dud. It will require more spending, how will that go down with conservatives? Not well. Consensus among pundits is that his speech will be the foundation of his agenda for the economic recovery that will set the tone for next year.
Over the weekend foreign equity markets were hit hard. The 10-yr yield to a record low 1.911%. A flight to safety in response to Monday's sell off in equity markets around the world was reversed after the Swiss National Bank took drastic measures, announcing a peg of 1.20 euro per 1 franc (trading at 1.10 pre-announcement). At 8:30 this morning the 10 yr traded at 1.94%. Mortgage markets will likely drag along but won't move as much as rates fall as treasuries. At 8:30 the 10 yr note +14/32, mortgage prices -3/32.
The increasing view is that the Fed will do another easing by increasing its balance sheet with longer dated maturities while selling shorted dated notes. Mostly talk so far but we hear it coming from many different sources. Markets are the measuring stick and traders are anticipating the move. In the last couple of days the 10 yr note and 30 yr bond yields declined while the middle of the curve (5 yr note) has remained generally unchanged and the 2 yr note actually increased in rate. If that will be the Fed's easing plan, will it get businesses to spend and hire, will it jump start home buying, will it support job growth? There will be no place to go to earn any return on cash; the stock market isn't going to improve if employment remains stagnant, can't park money in the bond markets, the 30 yr bond has fallen 37 bp in the last two weeks---maybe some corporates, but not much; gold will likely continue higher as investors scramble for any kind of return. Commodities may increase but again without economic growth there is a limit on how much higher prices will go. The Federal Reserve is essentially out of bullets; from now on it is up to fiscal policies (Congress and the Administration).
At 9:30 the DJIA opened down 210 points, the 10 yr note +16/32 at 1.94% -6 bp; mortgage prices +1/32 (.03 p). By 9:35 the DJIA down 270, NASDAQ -58 and the S&P -28.
At 10:00 the August ISM services sector index, expected at 51.0 frm 52.7 in July, was at 53.3. The components; new orders 52.8 frm 51.7, employment 51.6 frm 52.5 and prices pd at 64.2 frm 56.6. Not much reaction to the slightly better data on services. Although better the services sector is still generally flat based on the data. Prices pd did increase, the first increase in many weeks. No recession based on the data but no real growth either.
This Week's Economic Calendar:
Wednesday;
7:00 am weekly MBA mortgage applications
2:00 pm Fed Beige Book
Thursday;
8:30 am weekly jobless claims (-9K to 400K; con't clams 3.70 mil from 3.735 mil last week)
July US trade balance (-$51.5B)
3:00 pm July consumer credit (+$5.0B)
8:00 pm President Obama's speech
Friday;
10:00 am July wholesale inventories (+0.7%)
Monday, September 5, 2011
Friday, September 2, 2011
Mortgage Rate Update
Forwarded exclusively by:
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, September 02, 2011
It is employment day, therefore it is a stunning day. The August unemployment rate was unchanged at 9.1%; everyone stunned with the rest of the data. Non-farm jobs were expected up 60K on the most recent estimates, as reported there was no increase---zero; the estimate for non-farm private jobs was an increase of 75K, as reported +17K. In essence, no one hired anyone in August. In July non-farm jobs were originally reported up 117K, that was revised today to +85K; between July and June revisions 58K jobs were taken away from the two previous reports. August factory jobs declined by 3K. Average hourly earnings were expected up 0.2%, as reported -0.1%. Government jobs were down 17K. This has to be one of the worst and most shocking employment report in years. Quotes of the day; Sec of Labor Solis; "we have done all we can"..."I am very optimistic about the future"..."people are waiting for Congress to act"......" incentives so far have worked"....."the President has a plan, we know what works"......"we have had no co-operation from the other side of the aisle"......???
The US economy is declining at a pace even the pessimists are surprised to see and will increase the view the economy is falling back into recession; but is it? As usual with the employment report this one leaves us with a question; why was the unemployment rate unchanged at 9.1%? The stock market is being hit hard on the report, the bond and mortgage markets of course are improving. Is the August report a one and off reaction to the clown show in Washington over the debt ceiling in July? Weekly jobless claims do not show job losses increasing, claims have held at about 400K for weeks, what we have in August is that no one added new jobs. The way Republicans and Democrats and the President acted over the debt ceiling, putting politics above the good of the nation, has dropped the confidence levels from CEOs to consumers; that is clearly evident with this report.
Senator Corker (Tenn.) on CNBC this morning hit the preverbal nail on the head; he said Washington (politicians) have no idea what makes businesses function. Amen. What took place in Washington in the aftermath of the 2008 crisis is coming home to roost within the business world. Regulations were piled on by Barney Frank and Chris Dodd as both saw an opportunity to increase government's influence on businesses and consumers. Neither one of them had, or have a clue; Dodd/Frank must be repealed as well as choking the life out of regulators.
The 10 yr note rate fell to 2.04% on the news, down 10 basis points from yesterday's close; mortgage prices jumped up 13/32 (.41 bp) on the initial reaction. The DJIA futures at 9:10 was down 153. At 9:30 the DJIA opened -135, the 10 yr note 2.04% -10 bp and mortgage prices +13/32 (.41 bp).
After this employment report two things will dominate in the next week. What will Obama say in his speech next Thursday evening? And what will the Fed do when the FOMC meets on the 21st of Sept? As for Obama, so far in this economic downturn he has stuck out on about everything he has proposed; lots of rhetoric but no substance, shovel-ready jobs--no, $53B for rapid rail---a waste of money, and it goes on. Republicans no better with the way they performed on the debt ceiling debates----children! The Fed has only on option that might help, QE 2 didn't do anything except print more money and increase the Fed's balance sheet, QE 3. Another easing to ram the 10 yr note below 2.00% that will lower mortgage rates may help some but not much as long as there is no changes in lending polices; underwriting, appraisals, and increased costs. The Fed's likely move may be to lengthen the maturity of its balance sheet; selling shorter dated maturities and increasing the longer maturities with the purpose of pushing the 10 yr lower and lower mortgage rates....1.5% on the 10 yr? not likely.
Forwarded exclusively by:
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, September 02, 2011
It is employment day, therefore it is a stunning day. The August unemployment rate was unchanged at 9.1%; everyone stunned with the rest of the data. Non-farm jobs were expected up 60K on the most recent estimates, as reported there was no increase---zero; the estimate for non-farm private jobs was an increase of 75K, as reported +17K. In essence, no one hired anyone in August. In July non-farm jobs were originally reported up 117K, that was revised today to +85K; between July and June revisions 58K jobs were taken away from the two previous reports. August factory jobs declined by 3K. Average hourly earnings were expected up 0.2%, as reported -0.1%. Government jobs were down 17K. This has to be one of the worst and most shocking employment report in years. Quotes of the day; Sec of Labor Solis; "we have done all we can"..."I am very optimistic about the future"..."people are waiting for Congress to act"......" incentives so far have worked"....."the President has a plan, we know what works"......"we have had no co-operation from the other side of the aisle"......???
The US economy is declining at a pace even the pessimists are surprised to see and will increase the view the economy is falling back into recession; but is it? As usual with the employment report this one leaves us with a question; why was the unemployment rate unchanged at 9.1%? The stock market is being hit hard on the report, the bond and mortgage markets of course are improving. Is the August report a one and off reaction to the clown show in Washington over the debt ceiling in July? Weekly jobless claims do not show job losses increasing, claims have held at about 400K for weeks, what we have in August is that no one added new jobs. The way Republicans and Democrats and the President acted over the debt ceiling, putting politics above the good of the nation, has dropped the confidence levels from CEOs to consumers; that is clearly evident with this report.
Senator Corker (Tenn.) on CNBC this morning hit the preverbal nail on the head; he said Washington (politicians) have no idea what makes businesses function. Amen. What took place in Washington in the aftermath of the 2008 crisis is coming home to roost within the business world. Regulations were piled on by Barney Frank and Chris Dodd as both saw an opportunity to increase government's influence on businesses and consumers. Neither one of them had, or have a clue; Dodd/Frank must be repealed as well as choking the life out of regulators.
The 10 yr note rate fell to 2.04% on the news, down 10 basis points from yesterday's close; mortgage prices jumped up 13/32 (.41 bp) on the initial reaction. The DJIA futures at 9:10 was down 153. At 9:30 the DJIA opened -135, the 10 yr note 2.04% -10 bp and mortgage prices +13/32 (.41 bp).
After this employment report two things will dominate in the next week. What will Obama say in his speech next Thursday evening? And what will the Fed do when the FOMC meets on the 21st of Sept? As for Obama, so far in this economic downturn he has stuck out on about everything he has proposed; lots of rhetoric but no substance, shovel-ready jobs--no, $53B for rapid rail---a waste of money, and it goes on. Republicans no better with the way they performed on the debt ceiling debates----children! The Fed has only on option that might help, QE 2 didn't do anything except print more money and increase the Fed's balance sheet, QE 3. Another easing to ram the 10 yr note below 2.00% that will lower mortgage rates may help some but not much as long as there is no changes in lending polices; underwriting, appraisals, and increased costs. The Fed's likely move may be to lengthen the maturity of its balance sheet; selling shorter dated maturities and increasing the longer maturities with the purpose of pushing the 10 yr lower and lower mortgage rates....1.5% on the 10 yr? not likely.
Thursday, September 1, 2011
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.
Thursday, September 01, 2011
Treasuries and mortgages opened a little better this morning as the bond and mortgage markets continue to move in a very narrow range ahead of tomorrow's August employment data. At 8:30 weekly jobless claims continue to hang above 400K, also in a tight range for the past month; claims were down 12K to 409K, last week's claims were revised up from 417K to 421K, continuing claims were down 18K. Also at 8:30 Q2 productivity declined 0.7% frm 0.3% and unit labor costs jumped 3.3% revised from 2.2%. None of the data had much impact on the rate markets.
Europe's stock markets ended a three day rally today. A manufacturing gauge based on a survey of purchasing managers in the 17-nation euro region fell to 49 in August from 50.4 the month before, London-based Markit Economics said today. That’s below an initial estimate of 49.7 published on Aug. 23 and indicates a contraction. U.K. manufacturing shrank the most in more than two years. Prior to the open here the US indexes traded slightly better but not much.
Yesterday the Administration announced the President's awaited speech would be at 8:00 pm Wednesday; we noted that it appeared to be politics as usual in Washington with the Republican candidates holding a debate in California at the same time. Well, last night the President's speech was changed to Thursday; hope springs eternal. Good for the President. Changing the date to Thursday comes when the NFL kicks off the 2011 season with the Packers. There is no time set yet, likely it will be prior to the game. David Gergen, director of Harvard University’s Center for Public Leadership and an adviser to Presidents Richard Nixon, Gerald Ford, Ronald Reagan and Bill Clinton, called it "a circus that just casts a deeper shadow on their prospects for getting together on substance"..... “We’ve dragged a serious debate about jobs into a crazy debate about scheduling a speech and serious people around the world look at it and say, ‘What the hell are you doing?" If we base the US economic outlook on our politicians, we are in very deep trouble in the future.
At 9:30 the DJIA opened -10, the 10 yr note +10/32 at 2.20% -2 bp and mortgage prices at 9:30 +5/32 (.15 bp).
The most important data today at 10:00; the August ISM manufacturing index, expected at 48.5 from 50.9 in July; as reported at 50.6, it didn't go negative. The components; employment 51.8 frm 53.5 in July, new orders 49.6 frm 49.2 and prices pd at 55.5 from 59.0. Any index under 50 is considered expansion. A better rep-ort than traders were expecting and rapidly turned markets over. The 10 yr note on the reaction declined from +11/32 to -3/32, mortgage prices prior to the 10:00 report +6/32 (.18 bp), dropped to -6/32 (.18 bp) a change of 12/32 (.37 bp).
July construction spending at 10:00, expected unchanged, fell 1.3%; June however was revised from +0.2% to +1.6%.
Rate markets will continue to resist any rallies through the day as long as the equity market holds the gains at 10:00 on the data. The DJIA was off 4 points prior to 10:00, at 10:10 +70. Look for re-pricing soon unless rate markets find support and bounce back up.
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, September 01, 2011
Treasuries and mortgages opened a little better this morning as the bond and mortgage markets continue to move in a very narrow range ahead of tomorrow's August employment data. At 8:30 weekly jobless claims continue to hang above 400K, also in a tight range for the past month; claims were down 12K to 409K, last week's claims were revised up from 417K to 421K, continuing claims were down 18K. Also at 8:30 Q2 productivity declined 0.7% frm 0.3% and unit labor costs jumped 3.3% revised from 2.2%. None of the data had much impact on the rate markets.
Europe's stock markets ended a three day rally today. A manufacturing gauge based on a survey of purchasing managers in the 17-nation euro region fell to 49 in August from 50.4 the month before, London-based Markit Economics said today. That’s below an initial estimate of 49.7 published on Aug. 23 and indicates a contraction. U.K. manufacturing shrank the most in more than two years. Prior to the open here the US indexes traded slightly better but not much.
Yesterday the Administration announced the President's awaited speech would be at 8:00 pm Wednesday; we noted that it appeared to be politics as usual in Washington with the Republican candidates holding a debate in California at the same time. Well, last night the President's speech was changed to Thursday; hope springs eternal. Good for the President. Changing the date to Thursday comes when the NFL kicks off the 2011 season with the Packers. There is no time set yet, likely it will be prior to the game. David Gergen, director of Harvard University’s Center for Public Leadership and an adviser to Presidents Richard Nixon, Gerald Ford, Ronald Reagan and Bill Clinton, called it "a circus that just casts a deeper shadow on their prospects for getting together on substance"..... “We’ve dragged a serious debate about jobs into a crazy debate about scheduling a speech and serious people around the world look at it and say, ‘What the hell are you doing?" If we base the US economic outlook on our politicians, we are in very deep trouble in the future.
At 9:30 the DJIA opened -10, the 10 yr note +10/32 at 2.20% -2 bp and mortgage prices at 9:30 +5/32 (.15 bp).
The most important data today at 10:00; the August ISM manufacturing index, expected at 48.5 from 50.9 in July; as reported at 50.6, it didn't go negative. The components; employment 51.8 frm 53.5 in July, new orders 49.6 frm 49.2 and prices pd at 55.5 from 59.0. Any index under 50 is considered expansion. A better rep-ort than traders were expecting and rapidly turned markets over. The 10 yr note on the reaction declined from +11/32 to -3/32, mortgage prices prior to the 10:00 report +6/32 (.18 bp), dropped to -6/32 (.18 bp) a change of 12/32 (.37 bp).
July construction spending at 10:00, expected unchanged, fell 1.3%; June however was revised from +0.2% to +1.6%.
Rate markets will continue to resist any rallies through the day as long as the equity market holds the gains at 10:00 on the data. The DJIA was off 4 points prior to 10:00, at 10:10 +70. Look for re-pricing soon unless rate markets find support and bounce back up.
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