Daily Market Update 1/30/09

Rates were little changed Friday following the release of preliminary fourth quarter Gross Domestic Product (GDP) figures. The data showed the economy contracted at a 3.8% pace last quarter, the worst performance since 1982, but better than expected. Stocks moved lower. Investors continue to focus on the proposed stimulus package and the Fed's plans to purchase Treasuries and mortgage-backed securities. Our offices remain closed due to massive power outages throughout the north-central Kentucky region as a result of the ice storm. We apologize for any inconvenience and hope to resume normal operations Monday.

Daily Market Update 1/29/09

Interest rates moved higher Thursday following yesterday's Federal Open Market Committee (FOMC) meeting. The Fed indicated a willingness to purchase long-term Treasuries if necessary to keep rates low, but investors had hoped for more clarity. Our offices remain closed today due to this week's severe ice storm in Louisville. We apologize for any inconvenience and will reopen as soon as power is restored to our building.

Daily Market Update 1/27/09

Mortgage-backed securities and Treasury rates moved modestly lower Tuesday as the Conference Board reported Consumer Confidence fell more than expected in January. The decline was attributed to the worsening labor market. Stocks edged higher on growing prospects for a new government economic stimulus package. The remainder of the week may be extremely volatile with several key announcements scheduled. Tomorrow the Fed wraps up their periodic Federal Open Market Committee meeting to determine monetary policy, Durable Goods Orders will be released Thursday, and fourth quarter Gross Domestic Product and the Chicago Purchasing Manager's Index are due out Friday.

Daily Market Update 1/26/09

Mortgage rates held steady Monday ahead of a spate of economic data due out this week. The National Association of Realtors reported an unexpected 6.5% increase in Existing Home Sales in December. The median home price nationally fell 15% from a year earlier. Leading Indicators rose 0.3% last month, exceeding forecast and registering the first increase in six months. Stocks moved higher on the reports. The Federal Open Market Committee (FOMC) of the Federal Reserve begins a two day meeting tomorrow. Policy makers are considering options for holding down long-term interest rates, including the purchase of longer-maturity Treasury securities. Some analysts have warned that such a move might distort the Treasury market and undermine the dollar, discouraging foreign central banks and sovereign wealth funds from buying Treasuries. Traders will be following the meeting closely even though short-term interest rate policy is expected to remain unchanged.

Daily Market Update 1/23/09

Mortgage rates were little changed Friday as stocks plummeted on weak earnings reports. No economic data will be released today. The dollar moved higher against the euro, oil prices fell. Mortgage-backed securities (MBS) and Treasury markets have been hurt all week by investor concerns about the large quantity of debt which will be issued to fund government programs. The Fed purchased $19 billion of MBS during the week, about the same as last week. They intend to purchase up to $500 billion of MBS directly from Fannie Mae and Freddie Mac during the first 6 months of 2009. The Federal Open Market Committee (FOMC) of the Federal Reserve will meet next Wednesday to discuss interest rate and monetary policy. No change is expected. Durable Goods Orders will be released Thursday. The first estimate for 4th quarter Gross Domestic Product (GDP) is due out Friday.

Daily Market Update 1/22/09

Mortgage rates continued their upward trend Thursday following a late sell-off of mortgage-backed securities (MBS) Wednesday. Treasuries and MBS's have been hard hit in recent days as traders have become wary of growing government debt obligations. In economic news, Housing Starts fell more than expected in December. Weekly Jobless Claims spiked to 589,000, more than forecast. Stocks moved sharply lower on the data. Freddie Mac reported refinance activity accounted for 89% of all conventional mortgage applications during the first three weeks of 2009. Lenders continue to struggle with capacity issues and have had to buffer pricing to limit application volume.

Daily Market Update 1/21/09

Mortgage rates inched higher Wednesday as concerns about the added supply of debt needed to fund all the government programs continued weighing on mortgage-backed securities and Treasury markets. Stocks were little changed following yesterday's sharp sell-off. Treasury Secretary-designate Tim Geithner called for "aggressive action to address the housing crisis and to get credit flowing again" in his Senate confirmation hearing. He also recommended tightening the terms for those companies receiving federal help. In other news, retail mortgage rates remain unusually high relative to the Fannie Mae required net yield (60 days), now at 4.55%. December Housing Starts and Weekly Jobless Claims will be released Thursday.