It seems the market euphoria caused by the European bailout package has subsided in favor of a reality check. As details are released investors are poking holes in the plan and many now view the bailout as a short-term solution, perhaps only delaying the inevitable. The result in the US markets is flat trading in both stock and bonds, with gold at $1216/oz, nearing an all time high.
Today the US Treasury is auctioning $38 billion of 3 year notes, which will be followed by $24 billion of 10 year notes on Wednesday and $16 billion of 30 year notes on Thursday. You should expect volatility to continue.
Tuesday, May 11, 2010
Monday, May 10, 2010
Market commentary
As expected, last week’ turbulence in the global bond and stock markets brought a wake-up call to the European Central Bank. Over the weekend the governing council of the ECB along with the International Monetary Fund and the Group of 8 (the largest global economic powers) decided on a “stabilization plan”, meaning the ECB will be buying sovereign and private bonds in the open market. This is the same strategy the Federal Reserve used and is being implemented today.
This plan and the accompanying actions, coupled with Friday’s strong employment data have had the desired effect on the markets. The Euro currency is rallying, global stock markets are skyrocketing, and bonds, especially U.S. Treasuries are swooning. The yield on the 10 year note has risen .15% to 3.55%, and mortgage rates are rising as well. The good news is that so far today mortgage bonds are performing better than treasuries, so don’t let this opportunity to lock at a low interest rate slip away!
This plan and the accompanying actions, coupled with Friday’s strong employment data have had the desired effect on the markets. The Euro currency is rallying, global stock markets are skyrocketing, and bonds, especially U.S. Treasuries are swooning. The yield on the 10 year note has risen .15% to 3.55%, and mortgage rates are rising as well. The good news is that so far today mortgage bonds are performing better than treasuries, so don’t let this opportunity to lock at a low interest rate slip away!
Friday, May 7, 2010
Market commentary
The Labor Department reported the U.S. economy added 290,000 jobs in April, and the March increase was revised upward to 230,000. The unemployment rate, however, rose from 9.7% to 9.9%. Expectations had been for new job creation of 180,000 to 190,000, so the surprise to the upside immediately drove bond price lower, prices higher.
As anticipated, the markets have shrugged off the employment data, continuing to focus on the situation in Europe. This is good news for us as prices for mortgages are slightly better than Thursday. Enjoy another opportunity to lock your borrowers at very low interest rates.
Have a great weekend, and do not forget Mother’s Day!!
As anticipated, the markets have shrugged off the employment data, continuing to focus on the situation in Europe. This is good news for us as prices for mortgages are slightly better than Thursday. Enjoy another opportunity to lock your borrowers at very low interest rates.
Have a great weekend, and do not forget Mother’s Day!!
Thursday, May 6, 2010
Market commentary
Bond and stock markets around the globe remain focused on the European sovereign debt problems. It is becoming clear this is not an issue that will be resolved any time soon, and may require central bank intervention---just as the Fed and other central banks were winding down the support programs.
This week we have experienced the classic flight to quality trade, as global equity markets sank, along with the Euro. While this is ultimately bad news for the global economy, the immediate impact of low mortgage rates for U.S. borrowers is something that should be taken advantage of while the opportunity is here.
Remember, tomorrow is the release of the monthly jobs report, which is currently expected to reflect job growth of 180,000 +, including temporary census workers.
This week we have experienced the classic flight to quality trade, as global equity markets sank, along with the Euro. While this is ultimately bad news for the global economy, the immediate impact of low mortgage rates for U.S. borrowers is something that should be taken advantage of while the opportunity is here.
Remember, tomorrow is the release of the monthly jobs report, which is currently expected to reflect job growth of 180,000 +, including temporary census workers.
Wednesday, May 5, 2010
Market commentary
The U.S. Treasury market is benefiting again today from fears of a sovereign debt crisis spreading in Europe. Stocks were battered Tuesday and opened lower again today as investors remain concerned Europe will fall back into recession.
ADP, the U.S. payroll processing company, reported its expected employment gains at 32,000 versus the 30,000 that had been projected. This measure is for private employers, so does not include the U.S. Census workers, which is the main reason Friday’s job report is projected to reflect 189,000 new jobs created in April.
Folks, interest rates have fallen substantially the past few days, with 30 year fixed rate conventional loans once again at 4.75% at a yield spread! Combine this with HSOA’s purchase special and it is a great deal for the borrower’s who recently signed contracts to purchase a home.
ADP, the U.S. payroll processing company, reported its expected employment gains at 32,000 versus the 30,000 that had been projected. This measure is for private employers, so does not include the U.S. Census workers, which is the main reason Friday’s job report is projected to reflect 189,000 new jobs created in April.
Folks, interest rates have fallen substantially the past few days, with 30 year fixed rate conventional loans once again at 4.75% at a yield spread! Combine this with HSOA’s purchase special and it is a great deal for the borrower’s who recently signed contracts to purchase a home.
Tuesday, May 4, 2010
Market commentary
A strong increase in factory orders and the expected boost in existing home sales have done nothing to overcome the fear that a financial rescue package for Greece may not be enough to prevent the same thing from happening to other countries. This fear has sent U.S. stocks tumbling with the DOW falling in excess of 200 points.
Treasury prices have rallied as investors seek a safe haven for their money, and mortgage bonds have improved as well. View this day as an opportunity to capture low rates at a great price for your May loan closings!
Treasury prices have rallied as investors seek a safe haven for their money, and mortgage bonds have improved as well. View this day as an opportunity to capture low rates at a great price for your May loan closings!
Monday, May 3, 2010
Market commentary
Good news!! HSOA is waiving the fee for no impounds in CA effective today, May 3, 2010!!
Over the weekend, the European Union and the International Monetary Fund (IMF) announced a support package of $110 billion for Greece. This in an effort to stem the steep drop in European bond prices, which is causing interest rates to spike. So, you may think this is only European tax money on the hook, but the IMF receives support from all major economies, including the U.S. So, good for you---after supporting the bailout of many U.S. companies you are now helping with the European bailout.
This week’s economic calendar is heavy with important data, culminating with Friday’s employment data. As of today, economists are projecting the U.S. economy added approximately 180,000 new jobs. This morning, we saw data that manufacturing accelerated last month and consumer spending increased for the sixth straight month.
Bond prices are retreating from Friday’s rally, and have given back most of the gains—even in the face of continued uncertainty in Europe. Expect another week of volatility.
Over the weekend, the European Union and the International Monetary Fund (IMF) announced a support package of $110 billion for Greece. This in an effort to stem the steep drop in European bond prices, which is causing interest rates to spike. So, you may think this is only European tax money on the hook, but the IMF receives support from all major economies, including the U.S. So, good for you---after supporting the bailout of many U.S. companies you are now helping with the European bailout.
This week’s economic calendar is heavy with important data, culminating with Friday’s employment data. As of today, economists are projecting the U.S. economy added approximately 180,000 new jobs. This morning, we saw data that manufacturing accelerated last month and consumer spending increased for the sixth straight month.
Bond prices are retreating from Friday’s rally, and have given back most of the gains—even in the face of continued uncertainty in Europe. Expect another week of volatility.
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