Daily Market Update 9/30/13

Rates were little changed Monday as investors remained focused on the budget impasse in Washington.  Stocks were sharply lower.  Stronger than expected economic data had little impact on markets.  This morning, the Chicago Purchasing Manager's Index rose to 55.7, beating forecast.  Readings above 50.0 indicate expansion in manufacturing in the Midwest Region.  No other key data will be released today.

Daily Market Update 9/27/13

Mortgage rates trended lower Friday as lack of progress in debt ceiling negotiations hurt stocks and boosted mortgage-backed securities.  This morning, the August Core PCE index, the Fed's preferred measure of inflation, rose 0.1%, matching forecast, and was just 1.2% higher than one year ago.  Personal Income increased 0.4%, in line with expectations.  Consumer Sentiment came in at 77.5, a bit higher than expected.  The Federal Housing Administration (FHA) announced it will need $1.7 billion from the Treasury to help cover losses on its reverse mortgage program for seniors.  No other key data will be released today.

Daily Market Update 9/26/13

Rates remained steady Thursday as mortgage-backed securities held onto recent gains.  Conventional 30-year fixed rates have now decreased by 3/8% over the past two weeks.  This morning, weekly Jobless Claims fell unexpectedly to 305,000, far below the consensus forecast of 330,000.  The computer glitches in two states that caused the data to be distorted in the prior two reports appears to have been corrected.  Pending Home Sales declined by 1.6%, a bit more than expected.  Stocks moved higher.  Results from today's 7-year Treasury auction will be released at 1:00 PM.

Daily Market Update 9/25/13

Mortgage rates held steady Wednesday as the market showed little reaction to today's economic data.  August Durable Goods Orders rose 0.1%, slightly above expectations.  New Homes Sales increased by 7.9% to 421,000 annual units, in line with forecast.  The Mortgage Bankers Association weekly purchase activity index rose 7.0%, while the refinancing activity index increased 4.9%.  Average reported conventional 30-year fixed rates fell to 4.62%, not including fees.  Results from today's 5-year Treasury auction will be released at 1:00 PM.

Daily Market Update 9/24/13

Rates inched lower Tuesday, largely reflecting yesterday's late rally in mortgage-backed securities.  In economic news, the July S&P/Case-Shiller 20-city home price index rose 0.6%, a bit less than forecast, and was 12.4% higher than one year ago.  Consumer Confidence fell to 79.7, close to expectations.  Results from today's 2-year Treasury auction will be released at 1:00 PM.

Daily Market Update 9/23/13

Rates were little changed Monday in quiet trading.  No key economic data will be released today.

Daily Market Update 9/20/13

Mortgage rates held steady Friday in quiet trading.  No economic data will be released today, although several Fed officials will be speaking this afternoon.

Daily Market Update 9/19/13

Rates moved lower Thursday as mortgage-backed securities rallied following yesterday's Fed announcement.  The Official Statement indicated the Fed would delay reducing the volume of monthly asset purchases, known as "quantitative easing" until it sees more evidence of economic growth, noting that the "tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market."  Investors had expected the Fed to begin scaling back its monthly purchases of $85 billion in Treasuries and mortgage-backed securities by about $15 billion.  In today's economic news, weekly Jobless Claims rose to 309,000, but for the second week in a row the figures were distorted by an upgrade to the computer systems in California and Nevada.  August Existing Home Sales increased unexpectedly to 5.48 million annual units, the highest level in over six years.  National Association of Realtors officials noted that August closings mostly represent contracts written in June and July, as mortgage rates began rising.  The Philly Fed Index, a survey of manufacturers in the mid-Atlantic region, jumped to 22.3, far exceeding expectations.  Leading Indicators rose by 0.7%, close to forecast.  No other key data will be released today.

Daily Market Update 9/18/13

Rates faced upward pressure Wednesday as investors eagerly awaited this afternoon's Fed policy statement.  In economic news, Housing Starts rose by 1% in August to an annual rate of 891,000, below the consensus forecast of 910,000.  A decline in multi-family units accounted for the shortfall.  No other key economic data will be released today.  The Fed statement will come out at 2:00 PM, followed by a press conference by Fed Chairman Bernanke at 2:30.  It is expected that we will learn additional details about the timing and scale of Fed tapering of bond purchases, how it will be divided between Treasuries and mortgage-backed securities, and how future purchase reductions will be determined.  The Fed will also release its economic forecast for 2016.  Extreme rate volatility is possible.

Daily Market Update 9/17/13

Mortgage rates were little changed Tuesday as the Federal Open Market Committee of the Federal Reserve began its two-day meeting to discuss monetary policy.  In economic news, the August Consumer Price Index (CPI) rose 0.1%, a bit less than expected, and was 1.5% higher than one year ago.  Core CPI, which excludes volatile food and energy components, also increased 0.1%, and was a tame 1.8% higher year-over-year.  There was little market reaction to the data, as investors await tomorrow's Fed statement, expected around 2:15 PM.  No other key data will be released today.

Daily Market Update 9/16/13

Rates inched lower Monday following the withdrawal of Lawrence Summers as a leading candidate to replace Ben Bernanke as Fed Chairman next year.  Summers would have faced confirmation difficulty among Senate Democrats who object to his ties to the banking industry.  His withdrawal leaves Janet Yellen, the current Fed Vice-Chair, as the clear favorite to replace Bernanke.  Yellen is seen as the more "dovish" of the two regarding inflation, and is more likely to maintain the Fed's loose monetary policy.  Today's economic data was over-shadowed by the news, and had little impact on rates.  August Industrial Production rose 0.4%, a bit below expectations.  The Empire State index, a survey of manufacturers in the region, came in at 6.3, well below forecast.  Readings above zero indicate expansion in the manufacturing sector.  Stocks moved higher.  No other key data will be released today.

Daily Market Update 9/13/13

Rates moved lower Friday following the release of weaker than expected economic data.  August Retail Sales rose 0.2%, below the consensus forecast of 0.5%.  The Producer Price Index (PPI) jumped 0.3%, above expectations, but the "Core" PPI, which excludes volatile food and energy components, was unchanged.  An increase of 0.1% had been expected.  Consumer Sentiment fell to 76.8, far below expectations.  The big news next week will be the two-day Fed meeting beginning on Tuesday.  No rate changes are expected, but investors will be watching closely for clues about the timing of a planned tapering of bond purchases by the Fed, known as "quantitative easing".  Most economists believe the Fed will begin scaling back its volume of purchases beginning this month, but recent data suggests that economic growth may be slowing.  Expect rates to be unusually volatile in the coming days.

Daily Market Update 9/12/13

Mortgage rates inched lower Thursday in quiet trading ahead of next week's key Fed meeting.  In economic news, weekly Jobless Claims declined sharply to 292,000, but the figures were of little comparative value as the totals lacked data from two states that were updating their computer systems.  August Import Prices were unchanged from July, which was below forecast.  Stocks were mixed.  Results from today's 30-year Treasury auction will be released at 1:00 PM.

Daily Market Update 9/11/13

Mortgage rates were little changed Wednesday in quiet trading.  This morning, the Mortgage Bankers Association weekly purchase activity index declined by 3.0%, while the refinancing activity index plummeted 20.2%.  The combined index reached its lowest level since November 2008.  Average reported conventional 30-year fixed rates increased to 4.80%, not including fees.  Results from today's 10-year Treasury auction will be released at 1:00 PM.

Daily Market Update 9/10/13

Mortgage rates held steady Tuesday while stocks rallied on stronger than expected economic data in China.  No key economic data will be released in the U.S. today.  Results from today's 3-year Treasury auction will come out at 1:00 PM.

Daily Market Update 9/9/13

Rates inched lower Monday as the rally in mortgage-backed securities continued following Friday's weaker than expected Employment Report.  No key economic data will be released today.

Daily Market Update 9/6/13

Rates moved lower Friday following weaker than expected employment data.  The economy added 169,000 jobs in August, a bit less than expected, but figures from previous months were revised lower by 74,000.  Although the Unemployment Rate fell unexpectedly to 7.3%, the decline was entirely due to people dropping out of the labor force.  The labor force participation rate (the percentage of people able to work who are working or are looking for work) dropped to the lowest level since 1978.  Today's data may cause the Fed to wait longer to begin tapering its bond purchase program.  In other news, comments from Russian officials indicating that Russia will support Syria in the event of a U.S. attack hurt stocks and boosted mortgage-backed securities.  No other key economic data will be released today.

Daily Market Update 9/5/13

Mortgage rates inched higher Thursday following the release of stronger than expected economic data and ahead of tomorrow's key Employment Report.  In economic news, weekly Jobless Claims fell to 323,000, beating forecast.  Second quarter Productivity was revised higher to 2.3%.  Payroll firm ADP estimated private sector job growth of 176,000 last month, in line with expectations.  The Institute for Supply Management services index jumped to 58.6, well above the consensus forecast of 55.0.  Factory Orders fell by 2.4%, which was better than expected.  Stocks moved higher.  No other key data will be released today.  The closely-watched Non-farm Payrolls Report for August will come out at 8:30 AM on Friday.

Daily Market Update 9/4/13

Mortgage rates held steady Wednesday as stocks moved higher.  This morning, the July Trade Deficit rose to $39.2 billion, above forecast.  The Beige Book, a survey of economic activity by the Fed's 12 regional banks, will be released at 2:00 PM.  The Mortgage Bankers Association weekly purchase activity index decreased by 0.4%, while the refinancing activity index increased by 2.0%.  Average reported conventional 30-year fixed rates fell to 4.73%, not including fees.  Investors are continuing to follow U.S. plans for Syria, and are beginning to focus on Friday's Employment Report for August.

Daily Market Update 9/3/13

Mortgage rates inched higher following the released of stronger than expected economic data.  This morning, July Construction Spending rose by 0.6%, beating forecast.  The Institute for Supply Management manufacturing index increased unexpectedly to 55.7 from 55.4.  Readings above 50.0 indicate expansion in the manufacturing sector of the economy.  Stocks opened higher as the U.S. did not launch a military strike against Syria over the weekend, increasing pressure on mortgage-backed securities.  No other key data will be released today.