Daily Market Update 8/31/10

Mortgage rates inched lower Tuesday on mixed economic data. The Chicago Purchasing Managers Index declined more than expected to 56.7 from last month's reading of 62.3. Readings above 50.0 indicate expansion in the manufacturing sector of the economy. Meanwhile, Consumer Confidence rose to 53.5, beating forecast. Minutes from the last FOMC meeting indicate the Fed considered resuming purchases of mortgage-backed securities in an effort to push mortgage rates even lower. No other data will be released today.

Daily Market Update 8/30/10

Rates were little changed Monday as mortgage-backed securities regained most of their losses from Friday. In economic news, July Personal Income rose 0.2%, a bit less than forecast. The Core PCE price index, the Fed's preferred measure of inflation, rose at a tame 1.4% annual rate, indicating inflation is still not a concern in the near term. Stocks moved lower. No other economic data will be released today.

Daily Market Update 8/27/10

Mortgage rates held steady early Friday, but faced upward pressure following Fed Chairman Ben Bernanke's comments to central bankers from around the world at today's annual monetary symposium in Jackson Hole, Wyoming. Bernanke said the Fed "will do all that it can" to ensure that the economic recovery continues. In economic news, second quarter Gross Domestic Product (GDP) was revised down to +1.6% from +2.4%, but this was above the consensus forecast of +1.4%. Consumer Sentiment came in at 68.9, a bit below expectations. St. Louis Fed President James Bullard stated that he believes housing market activity and home prices will remain roughly flat for the time being. He also suggested that the Fed will probably not resume purchases of mortgage-backed securities (MBS). Next week will be extremely busy in terms of new economic data, which may cause volatility in the MBS market. The Chicago Purchasing Managers Index and minutes from last month's Fed meeting will be released on Tuesday, the Institute for Supply Management manufacturing index comes out on Wednesday, and the closely-watched Non-farm Payrolls report for August will be released on Friday.

Daily Market Update 8/26/10

Rates held steady Thursday as weekly Jobless Claims fell to 473,000, below the consensus forecast of 485,000. Stocks inched higher. Freddie Mac reported weekly average 30-year fixed rates of 4.36% with 0.7 "points", the lowest on record. Results from today's 7-year Treasury auction will come out at 1:00 PM. No other key economic data will be released today.

Daily Market Update 8/25/10

Mortgage rates were little changed Wednesday in spite of weaker than expected economic data. July Durable Goods Orders rose 0.3%, far below the consensus forecast of +2.5%. Meanwhile, the Commerce Department reported New Home Sales fell in July by 12.4% to an annual rate of 276,000 units, the lowest level since 1963. The Mortgage Bankers Association weekly purchase activity index rose 0.6%, while the refinancing activity index increased 5.7%. Average reported 30-year fixed rates fell to 4.55% (excluding fees), a new record low. Results from today's 5-year Treasury auction will be released at 1:00 PM.

Daily Market Update 8/24/10

Mortgage rates inched lower as weakness in the stock market lifted mortgage-backed securities and Treasurys. Existing Home Sales tumbled 27.2% in July to a 15-year low. A decrease of 12% had been forecast. Stocks moved sharply lower. Results of today's 2-year Treasury auction will be released at 1:00 PM.

Daily Market Update 8/23/10

Mortgage rates were little changed Monday as stock prices moved modestly higher. No economic data will be released today.

Daily Market Update 8/20/10

Mortgage rates inched higher Friday in light trading, as mortgage-backed securities prices finished the week very close to where they started. No economic data was released today. Next week, Existing Home Sales will be released on Tuesday, New Home Sales and Durable Goods Orders on Wednesday, and revisions to second quarter Gross Domestic Product (GDP) and Consumer Sentiment will come out on Friday.

Daily Market Update 8/19/10

Mortgage rates dipped Thursday on negative economic data, recapturing territory lost earlier this week. Weekly Jobless Claims rose unexpectedly to 500,000, the highest level of the year. The Philadelphia Federal Reserve manufacturing activity index came in at -7.7, compared to a consensus forecast of +7.5. Readings below zero indicate contraction in the manufacturing sector of the economy. Leading Indicators rose 0.1%, in line with expectations. Stocks moved sharply lower. No other data will be released today.

Daily Market Update 8/18/10

Mortgage rates were little changed Wednesday in quiet trading. The Mortgage Bankers Association weekly purchase activity index fell by 3%, while the refinancing activity index rose by 17% to the highest level in 15 months. Average reported rates for the week rose to 4.60% from 4.57%. Bankrate reported that average closing costs rose 36.6% over the past year. Increased government regulation and reduced competition are the likely culprits. Yesterday, during opening statements at the housing-finance conference to discuss the future of Fannie Mae and Freddie Mac, Treasury Secretary Timothy Geithner voiced support for a continued government role in the guarantee of home mortgages. The Obama Administration plans to unveil a detailed proposal in January 2011. No economic data will be released today.

Daily Market Update 8/17/10

Rates inched higher Tuesday on mixed economic news. The Producer Price Index (PPI) rose 0.2% in July, matching expectations, but Core PPI, which excludes volatile food and energy components, rose more than forecast. July Housing Starts increased by 2%, while Building Permits, a leading indicator, fell by 3% to the lowest level since May 2009. Industrial Production jumped 1.0% in July, doubling the consensus forecast of +0.5%. Stocks moved higher. The Treasury begins a conference today to discuss the future of Fannie Mae and Freddie Mac. The two agencies have cost taxpayers nearly $150 billion since having been taken over by the government in 2008. Options range from full nationalization to full privatization, with a host of alternatives in between. No decision is expected until early next year.

Daily Market Update 8/16/10

Rates eased Monday as global bond markets rallied on concerns over a weakening recovery. The Empire State regional manufacturing index came in at 7.1, below consensus forecast. Orders and sales declined for the first time in more than a year. Stocks moved lower. No other economic data will be released today.

Daily Market Update 8/13/10

Mortgage rates retreated from record lows following a sharp sell off of mortgage-backed securities (MBS) late Thursday. Analysts attributed the increase in MBS yields to high refinancing demand. Friday's economic data came in close to expectations. July Retail Sales rose 0.4%. The Consumer Price Index (CPI) rose 0.3%, while Core CPI, which excludes volatile food and energy components, rose at a slim 0.9% annual rate. Consumer Sentiment came in at 69.6, slightly above forecast. Next week will be relatively light in terms of new economic data. The Producer Price Index and Industrial Production will be released on Tuesday.

Daily Market Update 8/12/10

Mortgage rates remained near record lows Thursday in volatile trading. This morning, weekly Jobless Claims rose unexpectedly to 484,000, providing further evidence of a slowing economy. Import Prices, excluding oil, fell 0.3%. Stocks moved lower. Freddie Mac reported record-low average 30-year fixed rates over the past week of 4.44% plus 0.7 points. Results from today's 30-year Treasury auction will be released at 1:00 PM.

Daily Market Update 8/11/10

Rates moved lower Wednesday following yesterday's Fed announcement and weaker than expected economic data in Asia. Stocks fell sharply. Yesterday, the Fed announced plans to resume purchasing US Treasurys in an effort to push rates lower and provide increased liquidity into the economy. In economic news, the June Trade Balance was -$49.9 billion, much larger than forecast. The Mortgage Bankers Association weekly purchase activity and refinancing activity indices both rose by 1%. Refinancing accounted for 78% of all activity. Results from today's 10-year Treasury auction will be released at 1:00 PM.

Daily Market Update 8/10/10

Rates were little changed Tuesday ahead of today's FOMC meeting of the Federal Reserve. In economic news, second quarter Productivity fell unexpectedly by 0.9%, the first drop since late 2008. Labor costs increased at a scant 0.2% annual rate. Stocks moved sharply lower. Results from today's 3-year Treasury auction will be released at 1:00 PM. The Fed announcement will come out at 2:15 PM. No rate changes are expected, but investors are divided about whether the Fed will reveal any significant changes in monetary policy, such as purchasing additional mortgage-backed securities.

Daily Market Update 8/9/10

Mortgage rates were unchanged in light trading Monday as investors await tomorrow's FOMC meeting. No economic data will be released today.

Daily Market Update 8/6/10

Rates inched lower Friday following disappointing employment data. The economy lost 131,000 jobs in July, more than expected. The Unemployment Rate, which is calculated differently than the Payrolls report, remained at 9.5%. Average Hourly Earnings, a proxy for wage growth, rose at a 1.8% annual rate. Yesterday, Freddie Mac reported average 30-year fixed rates for the previous week of 4.49% with 0.7 points, the lowest level on record. The big story next week will be Tuesday's Federal Open Market Committee (FOMC) meeting of the Federal Reserve. While no rate change is expected, the Fed has been considering other measures to stimulate the economy, including the resumption of its mortgage-backed securities purchase program. Investors will be watching closely. Separately, the Treasury will hold large auctions of 3-, 10-, and 30-year securities over three days beginning Tuesday. The Consumer Price Index and July Retail Sales will come out Friday. No other data will be released today.

Daily Market Update 8/5/10

Rates were little changed Thursday as mortgage-backed securities recovered from yesterday's losses on weak labor market data. Weekly Jobless Claims rose to 479,000, a 3-month high, but unusual seasonal adjustments related to the auto sector may have skewed the results. The European Central Bank (ECB) left rates unchanged, as expected. Investors will be closely watching tomorrow's Non-farm Payrolls report for July. No other data will be released today.

Daily Market Update 8/4/10

Rates held steady Wednesday as today's economic data came in close to expectations. This morning, the ADP estimate for Friday's Employment Report was for a net gain of 42,000 private sector jobs. The Institute for Supply Management services index rose to 54.3 from 53.8 last month. Readings above 50.0 indicate expansion in the services sector of the economy. The Mortgage Bankers Association weekly purchase activity index rose 2% as average reported 30-year fixed rates fell 9 basis points to 4.60 last week. Stocks moved modestly higher. No other data will be released today.

Daily Market Update 8/3/10

Rates were little changed Tuesday. In economic news, Pending Home Sales fell 2.6% in June, less than expected. Factory Orders declined for the second straight month by 1.2% against a consensus forecast of -0.5%. June Personal Income and Consumer Spending were flat. Today's Wall Street Journal reported that the Fed is considering a change in policy which would involve purchasing more mortgage-backed securities or Treasury bonds to push yields lower. No other data will be released today.

Daily Market Update 8/2/10

Mortgage rates rose slightly Monday as stocks rallied on stronger than expected economic news. The July ISM manufacturing index fell less than forecast to 55.5 from 56.2 in June. Readings above 50.0 indicate expansion in the manufacturing sector. Construction Spending rose 0.1%. A decrease of 1.0% had been expected. No other data will be released today.