Daily Market Update 8/29/08

Mortgage rates improved slightly Friday as Personal Income showed a much larger decline than expected, due to the end of the government stimulus checks. The Core PCE price index, the Fed's preferred inflation indicator, rose to a 2.4% annual rate. The central bank would like to see this reading drop below 2.0%. The Chicago Purchasing Manager's Index, which measures manufacturing activity, came in well above expectations. Stocks were lower as oil prices staged their biggest weekly gain in two months due to the shutdown of Gulf oil rigs in preparation for the approaching storm.

Daily Market Update 8/28/08

Mortgage rates had little reaction Thursday to an upward revision in second quarter Gross Domestic Product to 3.3% from 1.9%. Higher than forecast economic growth was attributed to strong export sales and the government stimulus package. Stocks climbed on the report. First time Jobless Claims dropped for the fourth consecutive week to 425K, in line with expectations. Troubled mortgage giant Fannie Mae announced a shakeup of top management, replacing their Chief Financial Officer, Chief Business Officer and Head of Risk Management. Oil prices continued their recent upward trend as tropical storm Gustav approached the Gulf of Mexico.

Daily Market Update 8/27/08

Mortgage rates were mostly unchanged Wednesday as Durable Goods Orders increased a surprising 1.3% in July, led by strong exports. Oil prices rose on concerns over the threat from tropical storm Gustav. Yesterday's release of the minutes from last month's FOMC meeting revealed growing concerns over inflation among board members and a strong likelihood that the next interest rate move by the central bank will be higher. Second quarter GDP figures are due out tomorrow.

Daily Market Update 8/26/08

Mortgage rates improved slightly Tuesday ahead of this afternoon's release of the minutes from the Fed's most recent FOMC meeting. Traders will be watching closely for clues on central bank policy in coming months. New Home Sales increased 2.4% in July leading some analyst to conclude we may be nearing the bottom of the real estate market. Stocks moved modestly higher as the dollar hit 6-month highs against the euro.

Daily Market Update 8/25/08

Rates showed slight improvement Monday as capital moved out of equities and into bonds and mortgage-backed securities. Stocks were sharply lower. Existing Home Sales rose 3.1% in July. The remainder of the week is packed with economic reports that may affect interest rates, beginning with Tuesday's release of the minutes from the last Federal Open Market Committee (FOMC) meeting, followed by Durable Goods Orders on Wednesday, preliminary second quarter GDP figures Thursday, and the Chicago Purchasing Manager's Index Friday.

Daily Market Update 8/22/08

Rates moved slightly higher Friday as stocks showed solid gains on lower oil prices and a stronger dollar. Federal Reserve Chairman Ben Bernanke spoke at the annual Fed conference in Jackson Hole, Wyoming this morning, saying a recovery in the dollar and declines in commodity prices should lead inflation to moderate in coming months. However, he warned that policy makers are prepared to act if price increases don't slow. No economic reports were released today.

Daily Market Update 8/21/08

Mortgage rates moved slightly higher Thursday, giving up gains made late Wednesday. Oil prices surged on increased tension between the US and Russia and a weaker dollar. Leading Indicators showed a 0.7% decline in July, more than double the consensus forecast, heightening concerns by analysts of an economic recession. Weekly Jobless Claims came in below expectations.

Daily Market Update 8/20/08

Interest rates remained little changed Wednesday morning with no major economic reports due to be released until next week. Shares of Fannie Mae and Freddie Mac tumbled for the second consecutive day on growing concerns over the likelihood of a federal bailout. The two beleaguered mortgage giants have $223 billion of bonds maturing by September 30. Their success in rolling over this debt may determine whether they can remain liquid. The companies have reported combined losses of nearly $15 billion over the past year.

Daily Market Update 8/19/08

Mortgage rates had little reaction to this morning's release of the July Producer Price Index showing a 1.2% rise from June, doubling expectations. The more closely watched core rate rose 0.7% from June, also exceeding consensus. Much like last week's release of the Consumer Price Index, traders shrugged off the report, since oil prices have fallen more than 20% in recent weeks. July Housing Starts came in at 965K, the lowest level since 1993. Stocks moved lower.

Daily Market Update 8/18/08

Rates were little changed Monday in light trading. Stocks were sharply lower, fueled by increased concerns over a possible government bailout of Fannie Mae and Freddie Mac. Traders remain focused on tomorrow's release of the Producer Price Index for July, a key measure of inflation.

Daily Market Update 8/15/08

Rates held steady Friday, having shown little movement for the week. July Industrial Production rose 0.2%, higher than expected. Oil prices continued their downward trend, reaching $111 pb, a 24% reduction from their July peak. The dollar strengthened against the euro and is now up 8% from its low last month. Stocks were mixed. The next major economic report due out is the Producer Price Index, scheduled for release Tuesday. Traders will be watching closely for signs of rising inflation.

Daily Market Update 8/14/08

Rates moved slightly higher following this morning's release of the Consumer Price Index for July, showing a 5.6% annual rate increase, the highest since 1991. Energy prices have dropped significantly over the past few weeks, however, and future readings will reflect this. Stocks rallied, as investors had feared even higher inflation figures. Weekly jobless claims came in above forecast, at 450K. The dollar was higher against the euro.

Daily Market Update 8/13/08

Rates showed little reaction to today's release of Retail Sales for July. The 0.1% decline was in line with expectations. Traders are nervous ahead of Thursday's Consumer Price Index report, a key indicator of inflation. Stocks moved lower as oil prices rose over inventory concerns.

Daily Market Update

Mortgage rates held steady Tuesday as stocks declined. Several key economic reports are due out later in the week beginning with tomorrow's report on Retail Sales. The dollar continued to strengthen against the euro, helping push oil prices down to about $112 pb, a 23% reduction from its peak last month.

Daily Market Update 8/11/08

Rates were little changed Monday with no major economic reports being released today. The second half of the week is likely to be a bit more volatile, beginning with Wednesday's release of Retail Sales for July, the Consumer Price Index on Thursday, followed by Friday's report on Industrial Production. Stocks were mixed, the dollar strengthened against the euro.

Daily Market Update 8/7/08

Mortgage rates were little changed Thursday, trailing US Treasury markets for a second day following steep second quarter losses reported by Freddie Mac. Weekly Jobless Claims came in at 455,000, well above consensus, but Pending Home Sales for June rose unexpectedly by 5.3%. The European Central Bank (ECB) left rates unchanged this morning. Stocks were lower, the dollar higher. Rates are likely to remain volatile ahead of tomorrow's earnings report by Fannie Mae

Daily Market Update 8/6/08

Mortgage rates moved higher Wednesday after Freddie Mac released disappointing second quarter earnings and warned of more trouble ahead. Freddie reported a net quarterly loss of $821 million, three times analysts estimates, and announced plans to raise additional capital. They also doubled reserves for future loan losses to $2.8 billion, citing rising delinquency and foreclosure figures. Mortgage-backed securities sold off sharply on the news, performing much worse than US Treasuries. Stocks moved lower. Fannie Mae plans to release their quarterly earnings report Friday.

Daily Market Update 8/5/08

Mortgage rates were unchanged to slightly higher Tuesday morning ahead of this afternoon's Fed policy decision regarding short term interest rates. Although expected to hold rates steady, their "bias" is likely to change from neutral toward higher (rates) to combat inflation. There has been some dissent among FOMC members at recent meetings. It is possible that 3 members of the 12-member panel will vote to increase rates. If so, this would be the largest number of dissenting votes since 1992. Many analysts feel the recent decline in oil prices may have taken some pressure off the immediate need for higher interest rates. Stocks and the dollar moved higher as oil prices dropped below $120 pb.

Daily Market Update 8/4/08

Mortgage rates inched higher Monday ahead of Tuesday's Federal Open Market Committee (FOMC) meeting of the Federal Reserve. Few economists expect any change in short term interest rates as a result of the FOMC meeting, but investors will be closely watching the accompanying Fed statement for clues as to the future direction of rates. Reports released today on Factory Orders and Personal Income both came in above consensus. Oil continued its recent decline, falling to $121 per barrel from a high of $146 last month. Stock prices were modestly lower.

Daily Market Update 8/1/08

Mortgage rates were unchanged following the Employment Report showing the US economy lost 51,000 jobs in July, a little less than expected. The Unemployment Rate rose to 5.7%, the highest level since March 2004. The Federal Reserve is now almost certain to hold short term interest rates at their present level at the FOMC meeting next Tuesday due to concerns over rising unemployment. Stocks moved lower, while the dollar was higher against the euro.