Daily Market Update 2/10/09

Mortgage rates inched lower Tuesday as stocks plummeted on news of the Treasury plan to assist banks and boost lending. Treasury Secretary Timothy Geithner detailed a plan to create a Public-Private Investment Fund with $500 billion seed money to buy distressed securities. The Treasury will also work with the Federal Reserve to provide up to $1 trillion in new consumer and business loans. Markets remained volatile as investors attempted to analyze the plans. Meanwhile, the Senate resumed debate over the proposed $800 billion stimulus package. Concerns over the growing cost of the various government-funded programs pushed Treasury yields higher.

Daily Market Update 2/9/09

Mortgage rates were little changed Monday as debate continued in the Senate over the proposed stimulus package. The measure is widely expected to pass, but with little Republican support. Congress wants to have a bill ready for the President's signature by next Monday, although differences remain between the House and Senate versions. President Obama will hold a prime time news conference this evening to promote the bill. Treasury Secretary Timothy Geithner will announce details tomorrow of a plan to relieve banks of their troubled assets. Traders of mortgage-backed securities will be watching closely, and market volatility is likely. No economic data will be released today.

Daily Market Update 2/6/09

Mortgage rates held steady Friday following the Non-farm Payrolls report for January. Net job losses totalled 598,000 last month causing the Unemployment Rate to rise to 7.6%. Both figures exceeded forecast. Paradoxically, stocks rose and Treasuries fell on the report. Negative economic news would normally cause the opposite reaction, but in this case traders bet the employment data would increase the odds of quick passage of a large government stimulus package. Such a measure would likely benefit stocks but pressure interest rates due to the large volume of new government debt needed to fund the plan. News of the Senate's fiscal stimulus proposal and the Treasury's financial institution cleanup plan may be the biggest drivers of mortgage rates next week. The most significant economic data will be Thursday's release of January Retail Sales. The market will close early Friday in observance of President's Day

Daily Market Update 2/5/09

Rates inched lower Thursday as Weekly Jobless Claims soared to a 26-year high of 626,000. Factory Orders fell 3.9% last month, more than forecast. Productivity rose unexpectedly. The Bank of England cut its benchmark rate to 1% today, the lowest level since the Bank's founding in 1694. The Senate plans to temporarily double the maximum tax "credit" for home buyers to $15,000 as part of the proposed economic stimulus package. The credit is actually an interest-free loan requiring repayment over 10 years. Investors are now focusing on tomorrow's Non-farm Payrolls report. Economists project net job losses of 500,000 for January, with the Unemployment Rate rising to 7.5%. Higher figures could push mortgage rates lower.

Daily Market Update 2/4/09

Mortgage rates were little changed Wednesday after having risen late Tuesday to their highest level since December 10. Mortgage-backed securities and Treasuries came under pressure yesterday as investors grew concerned over the increased supply of government debt needed to fund the various stimulus plans. In economic news, the Institute for Supply Management Services Index rose unexpectedly last month, although the measure showed continued weakness in the services sector. Stocks were mostly higher.

Daily Market Update 2/3/09

Mortgage rates were little changed Tuesday as Pending Homes Sales rebounded unexpectedly in December following three consecutive monthly declines. Lower home prices and interest rates fueled the sales increase. Bargain hunters appear to be entering the market, which may be an early indication of much-needed stabilization. Stocks moved modestly higher. Debate continues in the Senate over the fate of the stimulus package, the cost of which has grown to nearly $900 billion. Minority Leader Mitch McConnell (R-Kentucky) proposed government-backed 4% mortgages as part of the plan, but the cost would likely be prohibitive and implementation problematic.

Daily Market Update 2/2/09

Our office is finally open following last week's devastating ice storm across Kentucky. We appreciate your patience and understanding during this difficult time and hope you all are safe and warm. Mortgage rates inched lower Monday after having risen the past three sessions. In economic news, the Institute for Supply Management's (ISM) Manufacturing Index rose unexpectedly in January, although activity remained weak. Construction Spending fell 1.4%, a bit more than forecast. Personal Incomes fell 0.2% last month, beating consensus. This will be a busy week for the release of economic data, including Pending Home Sales Tuesday, the ISM Services Index Wednesday, Productivity and Factory Orders Thursday, and Non-farm Payrolls Friday. Combined government spending for the proposed $819 billion stimulus plan, the TARP program, the Fed purchase of mortgage-backed securities, and a proposed bank cleanup is applying upward pressure on interest rates. One positive note is that foreign investors continue to show strong demand for US bonds.