Daily Market Update 12/21/12

Mortgage rates edged lower Friday as investors became increasingly concerned about the chances that a deal would be reached to avoid the "fiscal cliff" before year end.  Last night, Republicans in the House failed to agree on a more modest "Plan B" approach, which President Obama and Democrats in the Senate had already dismissed as inadequate.  In economic news, November Durable Goods Orders increased by 0.7%, beating forecast.  Personal Income rose 0.6%, above the consensus of 0.4%.  The Core PCE price index, the Fed's preferred measure of inflation, was unchanged in November, and was a tame 1.5% higher than one year ago.  Consumer Sentiment fell to 72.9, below expectations.  No other key data will be released today.  After today, I will be out until January 2nd.  Have a Merry Christmas and Happy New Year!

Daily Market Update 12/20/12

Mortgage rates held steady Thursday following the release of stronger than expected economic data.  Third quarter GDP was revised higher to show economic growth of 3.1%, well above the 2.7% level reported last month.  Weekly Jobless Claims rose to 361,000, close to forecast.  Leading Indicators declined 0.2%, matching expectations.  The Philadelphia Fed Index, a survey of manufacturers in the region, rose to 8.1.  A reading of -2.0 had been expected.  Readings above zero indicate expansion in the manufacturing sector.  Existing Home Sales jumped 5.9% to 5.04 million annual units, the highest level in three years.  No other key data will be released today.

Daily Market Update 12/19/12

Mortgage rates were little changed Wednesday after inching higher over the past few days.  In economic news, November Housing Starts declined 3% to an annual rate of 861,000, below forecast.  Meanwhile, Building Permits, a leading indicator, increased 4% to the highest level since July 2008.  Investors' main focus remains the "fiscal cliff" negotiations in Washington, where progress has been slow.  Results from today's 7-year Treasury auction will be released at 1:00 PM.

Daily Market Update 12/17/12

Mortgage rates held steady Monday as weaker than expected economic data was offset by increased optimism that a deal will be reached to avoid the "fiscal cliff".  This morning, the Empire State Index declined to -8.1, well below the consensus forecast of +1.0.  Readings below zero indicate contraction in manufacturing in the region.  Results from today's 2-year Treasury auction will be released at 1:00 PM.

Daily Market Update 12/14/12

Mortgage rates were little changed Friday as investors appear to be more focused on budget negotiations than on economic data.  This morning, the November Consumer Price Index (CPI) fell 0.3%, below forecast, but was 1.8% higher than one year ago.  Core CPI, which excludes volatile food and energy components, rose 0.1% and was 1.9% higher year-over-year.  Industrial Production jumped 1.1% in November, beating expectations.  No progress was reported on fiscal cliff negotiations following last night's meeting between President Obama and House Speaker Boehner.  Greece received approval for its next round of European Union aid.  No other key data will be released today.

Daily Market Update 12/13/12

Mortgage rates inched higher Thursday following yesterday's Fed announcement and stronger than expected employment data.  On Wednesday, the Fed announced it will purchase $45 billion per month of long-term Treasury securities beginning in January 2013.  The Fed also announced it will keep the Fed Funds Rate near zero until the Unemployment Rate falls below 6.5% or inflation tops 2.5%.  In economic news, weekly Jobless Claims fell to 343,000, well below forecast.  The November Producer Price Index (PPI) fell 0.8%, below the consensus of -0.5%, and was 1.5% higher than one year ago.  Core PPI, which excludes food and energy components, increased 0.1%.  Retail Sales rose 0.3%, which was close to expectations.  Results from today's 30-year Treasury auction will be released at 1:00 PM.

Daily Market Update 12/12/12

Rates remained near record lows Wednesday ahead of this afternoon's Fed announcement, which is due out at 12:30 PM.  Fed Chairman Ben Bernanke will hold a press conference at 2:15.  The Fed's "Operation Twist" stimulus program is set to expire at the end of the year.  Under the program, the Fed sells short-term Treasurys and buys an equal amount of long-term Treasurys to help keep long term rates low.  Investors expect the Fed to announce a replacement program in which the Fed simply purchases long-term Treasurys in addition to the $40 billion of mortgage-backed securities now being purchased monthly.  In economic news, November Import Prices declined 0.9%, below the consensus forecast of -0.5%, mostly due to lower energy prices.  No other key data will be released today.