Daily Market Update 8/9/11

Rates inched higher Tuesday morning as stocks partially recovered from yesterday's drubbing.  The Federal Open Market Committee (FOMC) of the Fed is meeting today to discuss monetary policy and will release a statement at 2:15 PM.  Investors will be watching closely for indications of further stimulus by the Fed.  In economic news, second quarter Productivity fell by 0.3%, a bit less than forecast.  Results from today's $32 billion 3-year Treasury auction, the first since Friday's US credit downgrade by S&P, will be released at 1:00 PM.

Daily Market Update 8/8/11

Rates moved lower Monday in spite of S&P's credit ratings downgrades of Fannie Mae, Freddie Mac, and Federal Home Loan Bank debt.  These follow Friday's downgrade of US debt.  A flight to quality from riskier assets, such as stocks and commodities, boosted Treasury bonds and mortgage-backed securities.  Oil prices fell sharply, while gold prices surged.  Investors are also focusing on the slowing pace of global economic growth.  Markets are likely to remain extremely volatile in the coming days.  No key economic data will be released today.

Daily Market Update 8/5/11

Mortgage rates inched higher Friday following a better than expected Employment Report.  The economy added 117,000 jobs in July, beating the consensus forecast of 85,000.  The Unemployment Rate unexpectedly declined to 9.1%.  Average Hourly Earnings, a proxy for wage growth, increased at a 2.3% annual rate, which was higher than expected.  Although the employment picture remains weak, today's data exceeded expectations in nearly every area, pushing stocks modestly higher and hurting bonds and mortgage-backed securities.  The big event next week will be Tuesday's FOMC meeting of the Fed.  While no rate change is expected, investors will be looking for indications that the Fed may be considering other stimulative measures.  Also next week, Retail Sales figures for July will be released on Friday.  No other key data will be released today.

Daily Market Update 8/4/11

Rates inched lower Thursday as concerns about debt problems in weaker European nations hurt stock markets and lifted mortgage-backed securities.  The European Central Bank (ECB) made no change in interest rates, as expected.  Weekly Jobless Claims came in at 400,000, matching forecast.  Tomorrow, the closely-watched Employment Report for July will be released at 8:30 AM.  No other data will be released today.

Daily Market Update 8/3/11

Rates continued their downward trend Wednesday as weakness in stock markets boosted bonds and mortgage-backed securities.  In economic news, payroll firm ADP forecast private sector job growth of 117,000 in July ahead of this Friday's Employment Report.  Factory Orders declined 0.8%, close to expectations.  The Institute for Supply Management services index fell to 52.7, a bit below forecast.  Readings above 50.0 indicate expansion in the services sector of the economy.  The Mortgage Bankers Association weekly purchase activity index rose by 5.1%, while the refinancing activity index increased by 7.8%.  Average reported 30-year fixed rates fell to 4.45%, not including fees.  No other key data will be released today.

Daily Market Update 8/2/11

Mortgage rates inched lower Tuesday, and are now at their lowest levels since November.  This morning, the June Core PCE price index, a preferred measure of inflation by the Fed, rose 0.1%, below the consensus forecast of +0.2%.  June Personal Income increased 0.1%, matching expectations.  Consumer Spending declined unexpectedly.  Last night the House passed a proposed $2.4 trillion debt ceiling increase.  The Senate is expected to pass the measure today and send it to the White House for final approval by President Obama.  Stocks moved sharply lower.  No other key data will be released today.

Daily Market Update 8/1/11

Rates moved lower Monday on weaker than expected economic data and optimism over a proposed debt ceiling increase.  The proposal calls for about $2.4 trillion in spending cuts over 10 years.  If passed, it's not clear whether the deficit reduction would be enough to prevent a downgrade in the credit rating of the US.  In economic news, the Institute for Supply Management manufacturing index fell to 50.9, far below forecast.  Readings above 50.0 indicate expansion in the manufacturing sector of the economy.  Construction Spending rose 0.2%, in line with expectations.  No other key data will be released today.