Daily Market Update 3/31/09

Mortgage rates were little changed Tuesday. Stocks partially rebounded from yesterday's sharp sell off. The Chicago Purchasing Manager's Index came in below consensus forecast, showing continued weakness in the economy. Consumer Confidence rose slightly from February but remained near record lows. No other economic data will be released today.

Daily Market Update 3/30/09

Mortgage rates inched lower again Monday as mortgage-backed securities markets benefited from a slide in stock prices. Oil prices fell below $50 per barrel on news from the ailing automobile industry. The dollar moved higher against the euro. No economic data will be released today.

Daily Market Update 3/27/09

Mortgage rates inched lower Friday as stock prices retreated. Personal Income declined 0.2% in February, a bit more than forecast, as job losses mounted. Consumer Sentiment rose slightly in March, but remained at low levels. The Core PCE price index, the preferred measure of inflation by the Fed, increased at a modest 1.8% annual rate, which was good news for mortgage-backed securities markets. The dollar moved higher, oil prices declined. Several major economic reports are due out next week, including the Chicago Purchasing Managers Index on Tuesday, the Institute for Supply Management manufacturing index Wednesday, and Non-farm Payrolls for March on Friday.

Daily Market Update 3/26/09

Rates held steady Thursday as fourth quarter GDP and weekly Jobless Claims came in close to expectations. Stocks inched higher. Treasury Secretary Timothy Geithner announced plans to expand Federal oversight of large hedge funds, private equity firms, and derivatives. Public outrage over the AIG debacle may bring additional regulation of non-bank firms. Retail mortgage rates remain stubbornly high relative to mortgage-backed securities' yields due to high refinancing demand. Borrowers may wish to consider waiting until their application is through underwriting before locking their rate, as short-term locks, such as 15 days, are priced about 1/4% to 3/8% below longer-term locks.

Daily Market Update 3/25/09

Mortgage rates were unchanged Wednesday following the release of stronger than expected economic data. Durable Goods Orders rose 3.4% in February, far above a forecast. New Home Sales rose 4.7% last month, driven by low interest rates, falling home prices, and the $8,000 first-time homebuyer tax credit. A small decline had been anticipated. Some analysts see these reports as further evidence the economy has begun to stabilize. Stocks moved higher on the data. In other news, the Fed began purchasing long-term US Treasurys today in an effort to hold down interest rates. Mortgage applications spiked last week as refinance activity rose sharply. Processing times slowed due to capacity limitations.

Daily Market Update 3/24/09

Mortgage rates were little changed Tuesday in the wake of yesterday's huge stock market rally. Investors will be watching the results of this afternoon's 2-year Treasury auction. Fed Chairman Bernanke and Treasury Secretary Geithner testified before Congress this morning calling for increased regulation of the banking industry. Stocks were modestly lower. No economic data will be released today.

Daily Market Update

Mortgage rates were little changed Monday as stocks rallied following the release of plans by the Treasury Department to buy troubled assets from banks. The Treasury will partner with private firms to purchase securities backed by sub-prime mortgages allowing banks to remove certain troubled assets from their books. In economic news, Existing Home Sales rose unexpectedly in February, driven by bargain prices, low mortgage rates, and the $8,000 first-time homebuyer tax credit. No other economic data will be released today.

Daily Market Update 3/20/09

Mortgage rates inched higher Friday in a relatively quiet session. Borrowers may benefit by waiting to lock in, as short-term locks, for periods such as 15 days, are priced much more favorably than longer-term locks. This is a function of the industry's limited capacity to process existing refinance volume. Once the loan is approved and ready for closing the borrower is able to take advantage of current market rates that are not priced artificially high in an effort to slow the influx of new business. In economic news, stocks were little changed. The dollar rebounded after having fallen sharply following the Fed's announcement of plans to purchase long-term Treasurys and mortgage-backed securities. Data on Existing Home Sales will be released next Monday. New Home Sales and Durable Goods Orders will be released Wednesday.

Daily Market Update 3/19/09

Interest rates plunged Thursday morning following yesterday's Fed announcement. The Federal Reserve will purchase an additional $750 billion of mortgage-backed securities from Fannie Mae and Freddie Mac and up to $300 billion in long-term Treasurys to help lower rates and stimulate the economy. Retail mortgage rates came under some pressure this afternoon as lenders struggled with capacity concerns due to the high volume of refinances. In economic news, weekly Jobless Claims came in close to consensus. Leading Indicators fell 0.4%, a bit less than expected. Stocks moved lower as oil prices surged and the dollar sank on investor concerns over yesterday's Fed action.

Daily Market Update 3/18/09

Mortgage rates inched lower Wednesday in spite of Consumer Price Index data showing a higher rate of inflation in February than forecast. The closely watched "core" rate rose at a 1.8% annual rate. In general, however, inflation is not a major concern for investors in the near term. Attention is now on this afternoon's announcement from the Federal Open Market Committee meeting. No rate change is expected, but the Fed may announce additional programs to boost the economy. Potential actions include an expansion of the mortgage-backed securities purchase program or the purchase of long-term Treasurys. Stocks and the dollar moved lower. No other economic data will be released today.

Daily Market Update

Rates held steady as today's economic data had little impact on mortgage-backed securities markets. The Producer Price Index came in close to expectations, although the closely-watched "core" rate rose above forecast. February Housing Starts jumped 22% from January to an annualized rate of 583,000 units, far above consensus. Building Permits, a leading indicator, also rose. Stocks were mixed. The Federal Open Market Committee (FOMC) begins a two day meeting today to discuss monetary policy. No rate changes are expected, although investors are waiting to see if the Fed announces plans to purchase Treasurys. Such a move might lower long-term rates temporarily but could prove inflationary over time.

Daily Market Update 3/16/09

Mortgage rates were little changed Monday as global stock prices moved higher. In a rare interview Sunday, Fed Chairman Bernanke said he believed the current recession would end this year and the economy would begin rebounding in 2010. In economic news, Industrial Output fell 1.4% in February, a bit more than forecast. Producer and Consumer Price data will be released over the next two days.

Daily Market Update 3/13/09

Interest rates moved generally higher Friday, although mortgage-backed securities outperformed Treasuries. Treasury bonds were rocked by comments from Chinese Premier Wen Jiabao expressing concern about a possible decline in the US dollar. The Chinese government holds large amounts of US debt, the value of which would deteriorate as the dollar falls. If the Chinese were to purchase fewer US securities, rates would likely move higher. In economic news, the Trade Deficit fell more than expected to the lowest level in six years as import prices (excluding oil) declined 0.6%. Consumer Confidence rose unexpectedly in February. Stock prices gained for the fourth consecutive day. Next week's economic calendar includes Capacity Utilization on Monday, the Producer Price Index Tuesday, and the Consumer Price Index Wednesday.

Daily Market Update 3/12/09

Mortgage rates moved lower Thursday following a brief rally in mortgage-backed securities markets late Wednesday. Retail Sales declined 0.1% in February, far less than expected. January figures were adjusted up to +1.8% from +1.0%. Lower fuel prices and deep discounts by retailers were largely credited with the gains. Still, the data may indicate consumer spending has begun to stabilize. Weekly Jobless Claims rose to 654,000, above consensus. Stocks were mostly higher. The Treasury will auction $11 billion of 30-year notes this afternoon. No other data will be released today.

Daily Market Update 3/11/09

Rates were little changed Wednesday ahead of this afternoon's auction of 10-year Treasury notes. Tuesday's stock market rally hurt Treasury yields, but had a lesser impact on mortgages. Stocks moved higher again today following the Obama Administration's release of plans to use capital injections as an incentive to get US banks to sell distressed securities to investors. The Treasury will provide private investors with government financing that will let them leverage their money to buy toxic assets, thereby increasing potential rewards. The government will then inject bailout funds into the banks to help replenish their capital and acknowledge losses. The strategy is intended to revive trading in mortgage-backed debt, and if successful, could help keep rates low. No economic data will be released today. Retail Sales figures for February will be released Thursday.

Daily Market Update 3/10/09

Mortgage rates remained little changed Tuesday as mortgage-backed securities outperformed Treasuries. Treasury markets sank ahead of this afternoon's $34 billion auction of 3-year notes. The government will also auction $18 billion of 10-year notes tomorrow and $11 billion 30-year notes Thursday. Traders are concerned about the immense supply of government debt needed to finance the various rescue and stimulus plans. Bonds came under further pressure as stocks moved sharply higher. Fed Chairman Ben Bernanke pressed for a complete overhaul of US financial regulations in a speech this morning before the Council on Foreign Relations. No economic data will be released today.

Daily Market Update 3/9/09

Rates inched higher early Monday as US stock prices rose, pressuring Treasuries and mortgage-backed securities. Asian and European stock markets moved sharply lower. Oil prices climbed to $48 per barrel on anticipated production cuts by OPEC. No major economic data will be released today.

Daily Market Update

Mortgage rates moved lower Friday reflecting gains in mortgage-backed securities (MBS) late Thursday. The Labor Department reported February job losses of 651,000, in line with expectations. The Unemployment Rate rose to 8.1% from 7.6% in January, the highest level since December 1983. Financial markets showed little reaction to the report, as many investors were prepared for even weaker data. Stocks and Treasuries moved slightly higher, MBS's were little changed. Next week will be light in terms of key economic data, with the exception of Wednesday's report on Retail Sales.

Daily Market Update 3/5/09

Mortgage rates improved slightly Thursday following weakness in the stock market and moves by central banks in Europe. The European Central Bank and Bank of England both cut benchmark rates by 1/2% to new record lows of 1.50% and .50%, respectively. First time Jobless Claims declined to 639,000, below consensus, but near record levels. Factory Orders fell 1.9%, less than forecast. The Mortgage Bankers Association reported 11.18% of borrowers are at least 30 days behind in their mortgage payments. Details of President Obama's Homeowner Stability Initiative were released yesterday and can be found at http://www.financialstability.gov/. Traders are now turning their focus to tomorrow's release of the Non-farm Payrolls report for February. A significant rise in unemployment may nudge rates lower.

Daily Market Update 3/4/09

Mortgage rates were little changed Wednesday as mortgage-backed securities outperformed Treasuries. Rebounding stock prices pushed Treasury yields higher, reversing a recent "flight-to-quality" pattern. The Institute for Supply Management services index fell in February, although the decline in the services sector of the economy was less than forecast. The Fed's "Beige Book", a survey economic conditions by their 12 regional banks, will be released this afternoon at 2:00 PM. Details of President Obama's plan to provide relief to troubled homeowners were released today. The Administration hopes to stem to tide of rising foreclosures and stabilize real estate prices. Investors are now turning their focus to the Non-farm Payrolls report due out Friday.

Daily Market Update 3/3/09

Mortgage rates were little changed Tuesday following slight improvement late Monday. The National Association of Realtors (NAR) reported a 7.7% decline in January's Pending Home Sales, more than double forecast. On a more positive note, the NAR's Affordability Index rose to 166.8 in January, the highest mark since tracking began in 1970. The combination of lower home prices and historically low interest rates has improved home affordability dramatically over the past year. Stocks moved generally higher. No other economic data will be released today.

Daily Market Update 3/2/09

Mortgage rates inched higher Monday, moving in opposite direction from Treasuries. Mortgage-backed securities' yields were little changed this morning but increased late Friday. January Personal Income rose 0.4%, well above forecast. A number of one-time factors such as military bonuses were responsible for the results. Construction Spending declined 3.3%, more than expected. The Institute for Supply Management factory index rose slightly, indicating contraction in the manufacturing sector may be slowing. Stocks and crude oil prices fell sharply. The Dow Jones Industrial Average moved below 7,000 for the first time since October 1997. Several key economic reports are due out this week, most notably February Non-farm Payrolls, to be release Friday.