Daily Market Update 6/30/08

Rates were little changed Monday after improving late Friday. The Chicago Purchasing Managers Index came in slightly above forecast, although the reading of 49.6 indicates contraction in U.S. manufacturing. All eyes now turn to Thursday's release of the Employment Report for June. The market will be closed Friday for the July 4th Holiday.

Daily Market Update 6/27/08

Rates were mostly unchanged Friday, having improved by about .125% for the week. The Fed's preferred measure of inflation, the core PCE (Personal Consumption Expenditures) report increased 0.1% for May, less than forecast. Consumer Spending rose 0.8% for the month, driven mostly by the distribution of economic stimulus checks. Oil prices hit a new record, topping $142 a barrel before settling slightly. Stocks were modestly lower after Thursday's drubbing. Several key economic reports are due out next week, beginning with the two primary measures of manufacturing activity, the Chicago PMI and the ISM Index scheduled for release Monday and Tuesday, respectively. Thursday's release of the Employment Report for June will be closely watched by traders and may trigger movement in interest rates.

Daily Market Update 6/26/08

Mortgage rates dipped slightly following yesterday's decision by the central bank to hold rates steady. Oil prices jumped and the dollar tumbled on the news. The Fed recognized inflation "uncertainty" remains high, but said the "Committee expects inflation to moderate later this year and next year." In other economic news, Existing Home Sales rose 2% in May from April but remained 16% below last May. Average U.S. home prices fell 6.3% from a year earlier.

Daily Market Update 6/25/08

Mortgage rates moved slightly higher Wednesday as traders await news from the central bank's Federal Open Market Committee meeting. Durable Goods Orders for May were unchanged from April, matching expectations. New Home Sales declined. No rate change is likely to result from today's Fed policy meeting, however the accompanying statement will be closely watched by the market for clues on the future direction of interest rates, and a large reaction is possible. The Fed announcement will come out at 2:15 PM et.

Daily Market Update 6/24/08

Rates were mostly unchanged Tuesday ahead of tomorrow's monetary policy announcement by the Fed. Consumer Confidence came in below expectations but the market showed little reaction to the report. Wednesday will be a potentially volatile day for mortgage rates as Durable Goods Orders and New Home Sales figures will be released in the morning, followed by the FOMC announcement in the afternoon.

Daily Market Update 6/23/08

Rates showed little movement Monday ahead of this Wednesday's meeting of the Federal Reserve Open Market Committee. Traders are likely to remain on the sidelines with no major economic reports due out today. Stocks remained near unchanged levels, the dollar was higher against the euro.

Daily Market Update 6/20/08

Mortgage rates remained little changed Friday, having improved slightly for the week. Traders scaled back expectations of aggressive rate hikes by the Fed in coming months amid signs of a deepening economic slowdown. Oil prices surged on reports of an Israeli military exercise rehearsing potential bombing attacks on nuclear facilities in Iran. Stocks and the dollar were lower. Next Wednesday will be a day to watch interest rates with the scheduled release of Durable Goods Orders for May and the central bank's Federal Open Market Committee meeting to determine monetary policy. While few forecasters expect any change in the Fed Funds Rate, the statement released following the meeting will be closely analyzed for clues as to the future direction of rates.

Daily Market Update 6/19/08

Rates moved slightly higher Thursday after improving late Wednesday. Freddie Mac reported weekly average mortgage rates at their highest levels in 9 months. Leading Indicators for May rose 0.1%, above expectations. Investors remain focused on rising inflation due to the recent spike in oil prices. The Fed's Open Market Committee meets next Wednesday, although no change in interest rate policy is expected.

Daily Market Update 6/18/08

Mortgage rates eased for a second consecutive day on expectations the Fed will wait until at least September before raising the target Fed Funds Rate. Growing signs of economic weakness will likely prevent the central bank from taking action sooner. Stocks and oil prices fell, the dollar was higher.

Daily Market Update 6/17/08

Rates improved Tuesday following reports showing economic weakness in Europe and easing concerns over an eminent rate increase by the Fed. Producer Prices rose at an annual rate of 7.2%, but the more closely watched "core" rate increased 3.0%, in line with expectations. Industrial Production declined slightly. Stocks and the dollar were lower.

Daily Market Update 6/16/08

Mortgage rates moved higher Monday on a weaker dollar and record high oil prices. Rates have now climbed about 3/4% in the past four weeks as inflation concerns have dominated investor sentiment.

Daily Market Update 6/13/08

Rates were little changed following Friday's release of the Consumer Price Index for May. While prices climbed 0.6% for the month (4.2% for the past 12 months), the "core" rate, excluding volatile food and energy prices, increased 0.2% as forecast. Global inflation fears pushed mortgage rates to their highest levels of the year this week. Tough talk concerning inflation by several Fed officials, including Chairman Ben Bernanke, raised expectations of central bank rate increases in coming months. The dollar continued its trend higher against the euro and yen. Next Tuesday will be an active day for economic news with the scheduled release of the Producer Price Index, Housing Starts, and Industrial Production.

Daily Market Update 6/12/08

Rates pushed higher Thursday, reaching their highest levels in over 8 months, on stronger than forecast Retail Sales for May. The unexpected resiliency of the US economy is seen as increasing the likelihood of earlier, more aggressive rate hikes by the Fed to curb inflation. Some analysts attributed the reported 1% increase in sales to the economic stimulus checks currently being distributed by the Treasury. Stocks and the dollar moved higher on the news.

Daily Market Update 6/11/08

Rates held steady early Wednesday as mortgage-backed securities partially regained ground lost Tuesday afternoon. Concerns over rising global inflation sent stocks lower. Investors fear central banks around the world will be forced to raise interest rates to fight inflation even though economic growth remains slow. Focus now turns to tomorrow's report on Retail Sales for May and Friday's release of the Consumer Price Index.

Daily Market Update 6/10/08

Rates continued trending higher Tuesday following last night's speech by Fed Chairman Ben Bernanke indicating policy makers will "strongly resist" any surge in inflation expectations. Bernanke also stated he believes the risk of substantial economic downturn has diminished in the past month. Mortgage rates have now risen by about 5/8% over the past three weeks reflecting growing inflationary concerns by investors. Many forecasters expect the central bank to begin raising rates in coming months in spite of generally weak economic conditions. Oil prices remained near record levels, the dollar was higher.

Daily Market Update 6/09/08

Rates moved higher Monday as stocks rebounded somewhat from a huge selloff Friday. Pending Home Sales showed a surprising 6.3% increase in April to their highest level since October. Some analysts are citing the report as evidence the real estate market may finally be bottoming out. Key economic reports this week include Thursday's release of Retail Sales data and Friday's release of the Consumer Price Index (CPI) for May.

Daily Market Update 6/6/08

Mortgage rates moved modestly lower Friday following the Employment Report for May showing a net loss of 49,000 jobs, and a surprising 1/2% jump in the unemployment rate to 5.5%. Rates inched higher for the week on the heals of Fed Chairman Bernanke's comments reflecting concern over rising inflation. Further rate cuts by the Fed now appear unlikely. The dollar fell sharply against most foreign currencies over the past two days causing a spike in oil prices from $122 to $134 a barrel, adding further upward pressure on rates. Next week will be a quiet week for economic reports with the exception of Thursday's release of Retail Sales figures for May.

Daily Market Update 6/5/08

Rates moved higher for a second day following Fed Chairman Ben Bernanke's comments yesterday emphasizing significant inflation concerns. Bernanke clearly indicated the central bank's focus has turned to fighting inflation and shoring up the weak US Dollar. Separately, weekly jobless claims came in at 357,000, better than the consensus of 370,000. The economy continues to show signs of remarkable resilience in spite of the depressed housing market and credit crunch.

Daily Market Update 6/4/08

Rates remained steady Wednesday as first quarter Productivity was revised higher, to 2.6% from 2.2%. Growth in productivity helps keep inflation in check by allowing companies to offset higher costs through greater efficiency. Oil prices continued their slide to around $123 a barrel, down from a peak of $135 last month. US consumers have abruptly changed their car buying patterns in the wake of higher gas prices, shunning trucks and SUV's in favor of smaller, more fuel efficient automobiles. Attention now turns to Friday's release of the Employment Report for May.

Daily Market Update 6/3/08

Mortgage rates remained little changed Tuesday after showing some improvement late Monday. Federal Reserve Chairman Ben Bernanke implied the central bank is unlikely to reduce interest rates further due to mounting inflationary pressures resulting from a weak US Dollar and rising commodity prices. In his first speech on the economic outlook in two months, Bernanke said the Fed is working with the Treasury to "monitor developments in foreign exchange markets" and is aware of the effect of the Dollar's decline on inflation. Analysts believe his remarks provide further evidence the Fed has shifted its focus from economic stimulus to price stability.

Daily Market Update 6/2/08

Mortgage rates were little changed Monday on news that April Construction Spending fell less than expected and the ISM Index, a key measure of the manufacturing sector, came in at 49.6 for May, up from 48.6 the previous month. While a reading below 50 indicates contraction in manufacturing, the increase was not expected. In other economic news, oil prices dropped below $126 a barrel and the Dollar was higher against the Euro. The main event for the week will be Friday's Employment Report. Early estimates are for a net loss of 50,000 jobs in May.