Market commentary

Monday’s market close has U.S. stocks firmly higher and Treasuries lower in price; higher in yield. Mortgage prices ended lower as well, forcing many lenders to worsen pricing mid-day.

This morning U.S. stock markets are falling on weak economic data out of Germany and a fall in U.S. housing starts. Housing starts fell 1.5% in July with building permits declining 3.2%.

One has to question the relevancy of this, but the rating agency Fitch has affirmed the AAA rating for the U.S. and kept the outlook stable. In the rating agency’s report, they cite the positive nature of the Budget Control Act in signaling a “political commitment to place U.S. public finances on a sustainable path consistent with the U.S. sovereign rating remaining AAA.” However, Fitch also warns in its report that failure by the Joint Select Committee to reach an agreement by its November 23 deadline would make the rating agency “less confident”.

While bond prices have improved this morning it is not enough to overcome the losses from Monday, so we see mortgages .255 to .375% worse in price.