Tuesday I mentioned today’s $21 billion auction of 10 year notes is likely to find some headwinds given the 10 year note was yielding 3.18%, and the market had not seen a 10 year auction below the 3.20% yield since November 2009. Well, this morning bond prices are sagging and the yield on the 10 year note has risen to 3.23%, so hopefully this new supply will be absorbed without an increase in rates.
Stocks posted gains on Tuesday and are trading in positive territory again today. Fed Chairman Bernanke commented he expects to see the U.S. economy avoid a double-dip recession, and expects the Euro to survive as a currency. I am sure you all feel much better now.
Mortgage bonds are trading .125% to .25% worse in price from the close on Tuesday; however, mortgage interest rates remain at extremely low levels---sub 4.50%!
Wednesday, June 9, 2010
Tuesday, June 8, 2010
Market commentary
Gold surged to a new high this morning, topping $1,250/oz. as concerns regarding the European economies lingers, and the Euro its price decline. Monday, U.S. stocks continued their decline giving bond prices another reason to improve---this scenario has reversed slightly this morning.
Bond prices are trailing off slowly in front of the U.S. auction of $38 billion of 3 year notes, as well as anticipating Wednesday’s 10 year note auction. This auction is likely to find some headwinds as the 10 year note currently yields 3.18%, and the market has not seen a 10 year auction below the 3.20% yield since November 2009.
For today, take advantage of the market---low interest rates and attractive home prices make this a great buying season!
Bond prices are trailing off slowly in front of the U.S. auction of $38 billion of 3 year notes, as well as anticipating Wednesday’s 10 year note auction. This auction is likely to find some headwinds as the 10 year note currently yields 3.18%, and the market has not seen a 10 year auction below the 3.20% yield since November 2009.
For today, take advantage of the market---low interest rates and attractive home prices make this a great buying season!
Monday, June 7, 2010
Market commentary
The markets remain focused on Friday’s employment data, with much discussion about the possibility of slowing economic growth. The question that will not be answered until next month, is was this a one off event, or is job growth slowing again?
The economic calendar is light this week, so the focus will be the U.S. Treasury auctions of 3 year notes, 10 year notes, and 30 year bonds, which will be held beginning tomorrow.
This morning’s WSJ has an extensive article on Fed policy, discussing the pressures which will keep the Fed on hold. It quotes several Fed officials who express concern about a “tail event” and who note that the economic facts do not justify shifting to a tighter policy stance.
Mortgage pricing is great again today, and even better with the HSOA purchase money and fico incentives!
The economic calendar is light this week, so the focus will be the U.S. Treasury auctions of 3 year notes, 10 year notes, and 30 year bonds, which will be held beginning tomorrow.
This morning’s WSJ has an extensive article on Fed policy, discussing the pressures which will keep the Fed on hold. It quotes several Fed officials who express concern about a “tail event” and who note that the economic facts do not justify shifting to a tighter policy stance.
Mortgage pricing is great again today, and even better with the HSOA purchase money and fico incentives!
Friday, June 4, 2010
Market commentary
Wow, the jobs report this morning surprised the markets---bad news for stocks and great news for bonds. Non-farm payrolls rose by 431,000, a decent number, however, when looking behind the curtain private sector employment rose by only 41,000 compared to an increase of 218,000 in April. Economists had estimated private sector jobs would grow by 191,000. The balance of the job growth was temporary hiring for the U.S. Census.
The result in the markets is a steep sell off in stocks, with the DOW currently lower by 200+ points and a rally in treasuries and mortgages. Mortgage pricing is .50% to .625% better than the market close on Thursday.
The result in the markets is a steep sell off in stocks, with the DOW currently lower by 200+ points and a rally in treasuries and mortgages. Mortgage pricing is .50% to .625% better than the market close on Thursday.
Thursday, June 3, 2010
Market commentary
The U.S. stock market had quite the bull run on Wednesday, resulting in a steep decline in bond prices. This morning mixed economic data has the stock market trading flat; however, bond prices are again lower.
The ADP private jobs report was expected to show employers added 100,000 new jobs in May; however, the actual data was half that number at 55,000. Positive economic data came from the Institute for Supply Management as this group reported the non-manufacturing sector of the economy expended for a fifth straight month. In addition, new orders at U.S. factories rose 1.2%, after declining the previous month.
Keep in mind tomorrow the Labor Department will release the jobs data for May, which is expected to show 500,000+ new jobs were added to the U.S. economy. Yes, this is a large number, which includes a significant amount of temporary workers hired by the Census Bureau.
The ADP private jobs report was expected to show employers added 100,000 new jobs in May; however, the actual data was half that number at 55,000. Positive economic data came from the Institute for Supply Management as this group reported the non-manufacturing sector of the economy expended for a fifth straight month. In addition, new orders at U.S. factories rose 1.2%, after declining the previous month.
Keep in mind tomorrow the Labor Department will release the jobs data for May, which is expected to show 500,000+ new jobs were added to the U.S. economy. Yes, this is a large number, which includes a significant amount of temporary workers hired by the Census Bureau.
Wednesday, June 2, 2010
Market commentary
Coming as no surprise to anyone, sales of previously owned homes rose 6% in April, as folks took advantage of the last month of a tax credit offered to home buyers. US stocks are higher on this news and the lack of depressing news from Europe. As for bonds, treasuries are slightly lower from the market close on Tuesday, and mortgage pricing is flat from Tuesday.
Bonds may begin to trade heavy in front of Friday’s payroll data, as prognosticators project in excess of 500,000 US jobs were created in May. Thursday morning we will get a glimpse of the jobs data when ADP, the large payroll processing company, releases their private employment survey.
Bonds may begin to trade heavy in front of Friday’s payroll data, as prognosticators project in excess of 500,000 US jobs were created in May. Thursday morning we will get a glimpse of the jobs data when ADP, the large payroll processing company, releases their private employment survey.
Tuesday, June 1, 2010
Market commentary
The Bank of Canada raised its key interest rate from a record low 0.25% to 0.50%, the first Group of Seven country to do so since last year’s global recession, and said further moves will be “weighed carefully” against future growth in Canada and elsewhere. In the U.S., the Institute for supply Management released its May index, which fell slightly to 59.7 from 60.4 in April. Keep in mind, an index reading above 50 indicates expansion in the manufacturing sector, and this is the 10th month this index has been above 50.
This week is full of important economic data culminating with the U.S. jobs report on Friday. Job growth is estimated to be 500,000 in April, with private employers contributing 170,000.
Again this week, Europe and its sovereign debt issues will be front and center, and it is clear this is now a long term problem. Expect volatility in stock and bond markets to continue as we get the push-pull of positive economic data from the US and the specter of sovereign debt defaults in Europe.
This week is full of important economic data culminating with the U.S. jobs report on Friday. Job growth is estimated to be 500,000 in April, with private employers contributing 170,000.
Again this week, Europe and its sovereign debt issues will be front and center, and it is clear this is now a long term problem. Expect volatility in stock and bond markets to continue as we get the push-pull of positive economic data from the US and the specter of sovereign debt defaults in Europe.
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