Daily Market Update 7/31/08

Interest rates moved lower Thursday on weaker than expected economic reports. Second quarter Gross Domestic Product (GDP) grew 1.9%, below forecast of 2.3%, and Weekly Jobless Claims spiked to 448,000, well above expectations of 395,000. Stocks and oil prices moved lower on the news. Much of the growth in GDP was attributed to the economic stimulus checks sent out last quarter. Congress is now debating additional stimulus measures, but the growing budget deficit may limit their options. Tomorrow's release of the Employment Report for July will be closely watched by traders and may be a significant market mover.

Daily Market Update 7/30/08

Rates were little changed Wednesday. President Bush signed the housing rescue bill into law this morning, easing some investors' concerns over the stability of the mortgage market. Stocks and the dollar were higher. No major economic reports are scheduled for release today.

Daily Market Update 7/29/08

Mortgage rates inched up Tuesday as an unexpected increase in Consumer Confidence and a drop in crude oil prices pushed stocks higher. Concerns grew over the newly released estimates for the 2009 Federal budget deficit, adding further pressure to interest rates. The market remains volatile, with wide daily swings in mortgage-backed securities prices. Several key economic reports are scheduled for release later this week, including the closely watched Employment Report due out Friday.

Daily Market Update 7/28/08

Mortgage rates improved Monday following the Senate's passage of the omnibus housing rescue package over the weekend. The bill has now moved on to President Bush for his signature. Investors' confidence in the stability of Fannie Mae and Freddie Mac had waned in recent weeks prior to the government's decision to stand behind the housing finance giants. Stocks and the dollar were lower.

Daily Market Update 7/25/08

Mortgage rates inched higher Friday as June Durable Goods Orders rose 0.8%, well above forecast. Adding further pressure to rates was a stronger than expected report on New Home Sales for June. The big news for the week was the likely passage of a comprehensive Housing Bill aimed at shoring up Fannie Mae and Freddie Mac, and providing up to $300 billion in new loans to troubled homeowners facing foreclosure. In addition, the bill provides funds for low income housing and a tax credit up to $7,500 for first-time home buyers. Next Friday's release of the Employment Report for July will be closely watched by investors and may be a significant market mover.

Daily Market Update 7/24/08

Rates improved Thursday following a spike in Weekly Jobless Claims and a larger than expected drop in Existing Home Sales. Home resales fell 2.6% in June. Nationally, median home prices dropped 6.1% compared with a year earlier. Yesterday the House passed a $300 billion housing rescue bill, as expected. The measure is likely to be approved by the Senate today or tomorrow before moving onto the White House, where President Bush has indicated his willingness to sign the bill. Stocks moved lower, oil prices held steady at about $124 a barrel, and the dollar was higher against the euro.

Daily Market Update 7/23/08

Rates were unchanged Wednesday with no major economic reports being released. President Bush dropped his threat to veto the sweeping housing bill being considered in Congress. The 700 page measure, offering up to $300 billion in assistance to troubled homeowners, will now likely be approved within days. The bill provides support to housing giants Fannie Mae and Freddie Mac, eliminates seller-funded down payment assistance programs, provides a limited tax credit to first time homebuyers, and increases minimim down payment requirements under FHA to 3.5% from 3%.

Daily Market Update 7/22/08

Mortgage rates remained near 11 month highs as Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank should increase rates "sooner rather than later" to head off inflation. Separately, Treasury Secretary Paulson suggested that Fannie Mae and Freddie Mac might need a support package from the government. The Congressional Budget Office estimated the likely cost of such a package would be $25 billion, but could exceed $100 billion depending on the length and severity of the housing downturn. The messages from both speakers hurt mortgage-backed securities markets. Oil prices resumed their recent downward trend, plummeting to $125 a barrel, a 14% drop over the past week. No major economic reports are due out today.

Daily Market Update 7/21/08

Rates were little changed Monday following a rough week ending July 18. Last week, global inflation fears hurt the bond and mortgage-backed securities markets. Additional pressure was applied to rates as stocks surged following a drop in oil prices from about $147 per barrel to about $129, causing funds to move out of fixed income securities and into stocks. During his testimony before Congress, Fed Chief Bernanke described the inflation outlook as "unusually uncertain". 30-year fixed rates are now at their highest levels since last August. The economic calendar will be lighter this week, with the most significant report due out Friday on Durable Goods Orders.

Daily Market Update 7/17/08

Rates moved higher in a volatile session on Thursday. Housing Starts rose unexpectedly, while first time unemployment claims dipped below forecast. Stocks were generally higher as concerns over the stability of major financial institutions eased. Treasury Secretary Henry Paulson tried to rally support in Congress for the Bush Administration's plan to rescue Fannie Mae and Freddie Mac. The proposal has met resistance in recent days, primarily among Republicans, citing concerns over the cost and questioning the need for such drastic measures.

Daily Market Update 7/16/08

Rates inched higher Wednesday as June's Consumer Price Index rose at a greater than expected 5.0% annual rate. Industrial Production for June also exceeded forecast, applying additional pressure on interest rates. Stocks and the dollar moved higher. Oil prices continued falling to about $135 a barrel from $146 on Monday. Minutes from the June 25 Fed meeting will be released at 2:00 PM et.

Daily Market Update 7/15/08

Rates held steady Tuesday as the impact of two key economic reports offset one another. The Producer Price Index came in at a higher than expected annual rate of 9.2% (although the "core" rate, excluding food and energy compenents, rose a more tame 3.0%), but Retail Sales fell short of expectations, rising just 0.1% from May. Federal Reserve Chairman Ben Bernanke testified before Congress, providing a more gloomy assessment of the economy than expected. The dollar hit new lows against the euro. Stocks moved lower on Bernanke's comments.

Daily Market Update 7/14/08

Mortgage rates improved Monday, regaining ground lost Friday afternoon, on reports the Fed and Treasury will take steps to support Fannie Mae and Freddie Mac. This will be a busy week for economic news beginning Tuesday with the Producer Price Index and Retail Sales reports, followed by Wednesday's release of the Consumer Price Index and Industrial Production for June, along with minutes from the last Fed meeting. Bank stocks tumbled following Friday's collapse of IndyMac and concerns over the stability of other large financial institutions, particularly Washington Mutual and National City Bank.

Daily Market Update 7/11/08

Mortgage rates improved Friday as speculation of a looming government bailout of Fannie Mae and Freddie Mac continued. The stocks of both companies fell further and are now down around 90% from one year ago. Fannie and Freddie, together, account for about 70% of mortgage originations in the U.S. Analysts agree the government would not allow their failure, as borrowing costs would rise significantly and the availability of mortgage loans would be severely restricted. Oil prices surged another $5 per barrel on top of the $5 jump yesterday, reaching a new high of $146. The Dow is off over 200 points.

Daily Market Update 7/10/08

Rates remained little changed Thursday as concerns grew over the financial stability of mortgage giants Fannie Mae and Freddie Mac. Stock prices for both companies hit their lowest point in over 15 years. The Wall Street Journal reported the Bush Administration has been considering a contingency plan should the companies become insolvent due to rising mortgage defaults. Most analysts believe the government would not allow Fannie or Freddie to fail given the impact such an event would have on the housing market. Separately, oil prices moved higher, the dollar lower, and stocks were mixed

Daily Market Update 7/9/08

Rates held steady Wednesday after improving late Tuesday. No major economic reports are scheduled for release today. Stocks are mixed, the dollar is lower.

Daily Market Update 7/8/08

Mortgage rates improved Tuesday, regaining territory lost Monday. Pending Home Sales fell 4.7% in June, greater than expected. Crude oil prices sank for a second consecutive day to about $136 a barrel, down from nearly $145 last Friday. Stocks and the dollar were modestly higher.

Daily Market Update 7/7/08

Mortgage rates rose modestly Monday as stocks climbed out of bear territory. Oil prices plunged over $4 a barrel and the dollar gained strength against the euro. With few economic reports due out this week, Fed speakers may provide the majority of news impacting interest rates.

Daily Market Update 7/3/08

Rates were little changed Thursday as the news contained few surprises. The economy lost 62,000 jobs in June, close to expectations. The Unemployment Rate remained at 5.5%. The European Central Bank (ECB) raised interest rates by 1/4% while indicating they believe this will be the only rate hike in the near term. Oil prices topped $145 a barrel, the dollar was higher. The financial markets close early today for the July 4th Holiday.

Daily Market Update 7/2/08

Rates were unchanged Wednesday morning after moving higher late Tuesday. No major economic reports are due out today. Tomorrow's session may be volatile, with the release of June's Employment Report, the announcement of interest rate policy by the Fed's European counterpart, the ECB, and an early market closing due to the Independence Day Holiday.

Daily Market Update 7/1/08

Mortgage rates were mostly unchanged Tuesday ahead of a potentially big day Thursday. In addition to the release of the Employment Report, a key measures of economic activity, the European Central Bank (ECB) is expected to boost rates by 1/4% Thursday. If they follow through as hinted by ECB President Jean-Claude Trichet, the Federal Reserve may be forced to raise rates sooner rather than later to avoid further erosion in the value of the dollar and continued escalation of oil and other commodity prices. The Fed has been doing a tough juggling act lately, attempting to balance the competing interests of a weak economy with rising inflationary pressures.