Daily Market Update 9/30/08

Rates inched higher Tuesday as stocks recovered partially from yesterday's losses. Speculation continued among traders that an economic rescue package will eventually pass Congress. Consumer Confidence and the Chicago Purchasing Manager's Index came in higher than forecast, but the news was overshadowed by events in Washington. The much-anticipated Employment Report for September will be released Friday.

Daily Market Update 9/29/08

Mortgage rates inched lower Monday as traders await further news on the proposed $700 billion rescue plan. Many lawmakers have expressed opposition to the plan but it is expected to pass within days. Also making headlines, Citigroup will purchase Wachovia, another firm which did not survive losses from mortgage investments. Today's economic data was mostly overlooked, as August Personal Income came in much lower than forecast. Domestic and foreign stock markets moved sharply lower. Oil prices fell to around $100 pb. The dollar traded higher against the euro.

Daily Market Update 9/25/08

Mortgage rates eased Thursday as Durable Goods Orders fell a larger than expected 4.5% in August. Jobless Claims rose to 493,000, far exceeding consensus. Rounding out the spate of negative economic news, New Home Sales fell 11.5% last month to their lowest levels in 17 years. However, investors' main focus has been the proposed $700 billion financial industry bailout. Last night President Bush went on live TV urging Congress to pass the plan to avoid a "long and painful recession". He is scheduled to meet today with presidential candidates McCain and Obama to discuss the proposal. Stocks moved higher as traders anticipate a swift passage of the plan.

Daily Market Update 9/24/08

Rates inched higher Wednesday as debate continued over the proposed $700 billion government rescue package. Fed Chairman Bernanke, testifying before the Joint Economic Committee, called for Congress to "act quickly to address the grave threats to financial stability". Opposition to the proposal has been growing among members of both parties and a quick resolution now appears less likely. In economic news, Existing Home Sales fell a larger than expected 2.2% in August. Year-to-date sales were down 10.7% from August 2007. Meanwhile, the median price fell 9.5% from a year earlier. Durable Goods Orders and New Home Sales figures will be released tomorrow.

Daily Market Update 9/23/08

Mortgage rates eased slightly Tuesday as traders await further news on the proposed $700 billion government bailout of the financial industry. Fed Chairman Bernanke and Treasury Secretary Paulson urged Congress to act swiftly to approve the plan. Stocks moved modestly higher. Oil prices stabilized at about $108 pb after soaring yesterday. No economic data will be released today.

Daily Market Update 9/22/08

Interest rates rose Monday as investors continue to work through the implications of the government's financial rescue plan. The unexpected increase in the supply of debt to fund the plan is hurting mortgage-backed securities and Treasury markets. Stocks and the dollar were sharply lower. No economic data will be released today.

Daily Market Update 9/19/08

Mortgage rates were little changed Friday as traders turned their focus to the broad relief program announced by the Treasury Department late yesterday. Specific details remain sketchy, but a government entity will be established to acquire underperforming mortgage assets from financial institutions. This will remove troubled assets and replace them with fresh capital for future lending opportunities. Major elements of the plan will require Congressional approval. Mortgage-backed securities have remained volatile in what has proven to be a truly historic week in financial markets. The economic calendar will be light next week with the exception of Durable Good Orders, to be released Thursday.

Daily Market Update 9/18/08

Mortgage rates inched higher Thursday amidst continued financial market turmoil. Weekly Jobless Claims rose to 455,000, while Leading Indicators fell 0.5% in August. Both reports came in worse than expected, but were eclipsed by news that the Federal Reserve and five other central banks agreed to pump $180 billion in reserves into the system to ease the growing liquidity crisis. Major banks have become reluctant to lend to each other for fear of unknown problems and the desire to hoard cash to protect themselves. The dollar fell against the euro and yen. Stocks were modestly lower. No other economic reports are due out this week.

Daily Market Update 9/17/08

Mortgage rates jumped late yesterday after the Fed announced it would hold the Fed Funds Rate steady, rather than reduce it by 1/4%, as many traders had expected. Market activity this morning has focused on an agreement by the Fed to loan AIG, the world's largest insurer, up to $85 billion for two years. AIG is expected to restructure and sell assets to repay the loan in what is being dubbed a "controlled bankruptcy". Housing Starts fell to their lowest levels since 1991 as the inventory of unsold homes remains high. Stocks moved sharply lower. Mortgage-backed securities' prices remain extremely volatile while investors attempt to analyze the recent spate of economic news.

Afternoon Update 9/16/08

Mortgage rates moved higher following the Fed's announcement that it would leave interest rates unchanged. Traders had been expecting a 25 basis point (1/4%) decrease in the Fed Funds Rate. The Federal Open Market Committee cited growing concerns over inflationary pressures in explaining their decision. While some analysts may be disappointed by the news, maintaining price stability is one of the key roles of the Fed. Holding short-term rates steady should help bolster the dollar and contain inflation, which may be beneficial in keeping a lid on long-term interest rates.

Daily Market Update 9/16/08

Interest rates have been extremely volatile all morning as traders attempt to assess the impact of recent turmoil in financial markets. Mortgage-backed securities' prices have swung back and forth between positive and negative territory several times in early trading. The Consumer Price Index showed a drop in retail prices for August of 0.1%, although the more closely-watched "core" rate increased 0.2%, in line with expectations. All eyes will be on the Fed this afternoon. The Federal Open Market Committee is expected to announce their decision regarding short-term interest rate policy at about 2:15 PM. Most economists predict a 25 basis point (1/4%) cut in the Fed Funds Rate, although the move is far from certain.

Daily Market Update 9/15/08

Mortgage rates improved slightly Monday morning, regaining territory lost Friday afternoon. Stocks plummeted on news of the bankruptcy filing of investment bank Lehman Brothers. Merrill Lynch, another major investment bank, will be purchased by Bank of America. AIG, the world's largest insurer, announced a restructuring which will include the sale of assets to raise capital. Oil prices dropped to $96 per barrel. The Consumer Price Index for August will be released Tuesday. The Federal Open Market Committee (FOMC) meets tomorrow and is considering lowering the Fed Funds target rate by 1/4% due to recent turmoil in the financial markets.

Daily Market Update 9/12/08

Mortgage rates held steady Friday, showing little reaction to reports on Producer Prices and Retail Sales for August. The "core" Producer Price Index, which excludes food and energy components, rose 0.2%, in line with consensus. Retail Sales fell well short of expectations with a decline of 0.3%. Stocks moved lower. Oil prices rose in anticipation of supply disruptions resulting from Hurricane Ike. Traders now turn their focus to next Tuesday's release of the Consumer Price Index for August and the Federal Reserve FOMC Meeting.

Daily Market Update 9/11/08

Rates were little changed Thursday as first-time Jobless Claims came in close to expectations. The dollar moved to its highest level against the euro in over a year; oil prices approached $100 pb., down from $147 two months ago. Stocks were mixed. Tomorrow's data on Retail Sales and Producer Prices looms large and may be a market mover.

Daily Market Update 9/10/08

Rates moved slightly higher Wednesday during another volatile session in the wake of the government bailout of Fannie Mae and Freddie Mac. Demand for mortgage-backed securities eased as stocks attracted capital from investors. Oil prices slid to $102 pb, while the dollar rose, approaching $1.40 against the euro. No economic reports were due for release today.

Daily Market Update 9/9/08

Mortgage rates inched lower Tuesday as traders continued to assess the impact of the government bailout of Fannie Mae and Freddie Mac. Sales of mortgage-backed securities surged Monday following the announcement, causing 30-year fixed rates to fall to around 6%. Pending Home Sales declined 3.2% in July. Stocks were lower. Investors are now turning their focus to Friday's release of Retail Sales data and the Producer Price Index. No other economic reports are due out today.

Daily Market Update 9/8/08

Mortgage-backed securities opened much higher this morning on news of the government takeover of Fannie Mae and Freddie Mac, resulting in the largest one-day drop in mortgage rates this year. While a conservator will have control over the two mortgage giants, day-to-day operations are expected to continue uninterrupted and with few changes. Stocks rallied in the US and abroad on the news. The dollar moved to its highest levels against the euro since last year. Oil continued its slide, reaching $105 pb.

Daily Market Update 9/5/08

The Unemployment Rate jumped to a five year high of 6.1% in August, helping to push mortgage rates to their lowest levels in 3 months. Non-farm Payrolls decreased by a larger than expected 84,000 last month. Stocks moved sharply lower on the report, extending yesterday's losses. The dollar strengthened, and has now risen 11% versus the euro in recent months. Oil prices dipped to $106 pb, representing a 28% decline since peaking in early July. Next week contains relatively little economic news until Friday's release of the Producer Price Index and Retail Sales data for August.

Daily Market Update 9/4/08

Mortgage rates improved Thursday as stocks slumped on weak economic news. Weekly Jobless Claims rose 15,000 to 444K, while several retailers reported sluggish sales. On a positive note, the Institute of Supply Management reported unexpected growth in the services sector of the economy in July. The dollar strengthened against the euro. Traders remain focused on tomorrow's release of the Employment Report for August.

Daily Market Update 9/3/08

Rates held steady Wednesday with little economic news scheduled for release. Factory Orders grew 1.3% in August, above consensus. Oil prices fell again today, reaching $107 per barrel, 27% below their July peak. Stocks were lower, the dollar higher.

Daily Market Update 9/2/08

Mortgage rates inched higher as stocks surged on falling oil prices. Crude oil plummeted to around $109 pb following lighter than expected damage from Hurricane Gustav. The ISM factory index showed a slight decline in US manufacturing last month. The Employment Report for August, due out Friday, will be closely watched by traders and may be a significant market mover. The dollar traded higher against the euro.