Mortgage applications rose 10.3% for the week ending November 4, led by an increase of 12.1% in refinance applications and a 4.8% increase in purchase applications. Later today the U.S. Treasury is scheduled to auction $24 billion in 10 year notes today, following a fairly successful 3 year note auction on Tuesday.
Of course, Italy and Greece remain in the forefront of financial news and continue to drive market volatility. Borrowing costs for these countries have skyrocketed and the European Union is not taking decisive action to stem investor fears. As a result, U.S. stock markets are selling off sharply U.S. Treasuries are benefiting from a flight to safety bid. The yield on the 10 year note has fallen to 1.96% and mortgage prices have improved by approximately .25% to .375%.
How do we know for certain our government has run amuck and is completely clueless? This week the U.S. national debt will cross the $15 trillion mark and today the Obama administration’s Agriculture Department announced a 15 cent tax on Christmas trees that will fund a Christmas Tree Promotion Board which will “provide maximum benefits to the Christmas tree industry”, and “will improve the image and marketing of Christmas trees”. You just can’t make this stuff up!
Wednesday, November 9, 2011
Tuesday, November 8, 2011
Market commentary
U.S. stock and Treasury markets are trading flat this morning; undecided on which way to move as they await the outcome of a crucial vote in Italy. The indecision surrounding the Greek and Italian financial woes, along with the financial problems in other European countries continues to grab headlines and drive volatility in the markets. The bad news is there does not appear to be a resolution in sight.
Mortgage prices are slightly improved from the close on Monday.
Mortgage prices are slightly improved from the close on Monday.
Monday, November 7, 2011
Market commentary
This is a shortened, quiet week in terms of U.S. economic data with the bond market closed on Friday in honor of Veteran’s Day. Last Friday Greek Prime Minister Papandreou survived the confidence vote, so in theory his government will now approve the bail-out package offered by the EU.
The focus now has turned to Italy with rumors that its Prime Minister may resign after a vote on an austerity package. With no U.S. economic data the markets remain focused on the European financial crisis. The major U.S. stock indices are trading lower this morning while treasury yields are falling/improving. Mortgage prices are unchanged to slightly better than Friday.
The focus now has turned to Italy with rumors that its Prime Minister may resign after a vote on an austerity package. With no U.S. economic data the markets remain focused on the European financial crisis. The major U.S. stock indices are trading lower this morning while treasury yields are falling/improving. Mortgage prices are unchanged to slightly better than Friday.
Friday, November 4, 2011
Market commentary
Nonfarm payrolls for the month of October rose 80,000, including a gain of 104,000 in private payrolls and a loss of 24,000 in government jobs. Recall that expectations were for a 95,000 gain in total payrolls. There was some positive underlying data in the report with sizeable revisions to the last two months’ data, raising the August and September numbers 102,000.
In the household report, the unemployment rate dropped to 9.0% as 277,000 more persons reported as being employed, with the number of long term unemployed falling 366,000 to 5.9 million. Even with the positive pieces of the report this is still indicative of a weak pace of job growth.
Bond prices fell slightly on the after the release of the jobs report, but have since rebounded, and the markets remain focused on events in Europe and what will eventually happen in Greece. As of this writing U.S. stocks are down sharply pushing bonds into positive territory. Mortgage prices are worse by .125% and .25%.
In the household report, the unemployment rate dropped to 9.0% as 277,000 more persons reported as being employed, with the number of long term unemployed falling 366,000 to 5.9 million. Even with the positive pieces of the report this is still indicative of a weak pace of job growth.
Bond prices fell slightly on the after the release of the jobs report, but have since rebounded, and the markets remain focused on events in Europe and what will eventually happen in Greece. As of this writing U.S. stocks are down sharply pushing bonds into positive territory. Mortgage prices are worse by .125% and .25%.
Thursday, November 3, 2011
Market commentary
Economic reports this morning included the ISM Non-Manufacturing Index and the weekly jobless claims data. For October the ISM index slipped to 52.9 from 53.0; expectations were for an increase to 53.5. One positive note in the report was the employment index which jumped to 53.3 from 48.7 the previous month.
Initial jobless claims for the week ending October 29 dropped to 397,000 form 406,000 the previous week. This makes just the third week of the past 29 that claims came in below 400,000. In a separate report unit labor costs fell 2.4% in Q3 as part of a 3.1% gain in productivity. This data reflects businesses are seeking to do more with the employees they have versus hiring new workers. For those of us in the mortgage space this is an obvious conclusion!
Again today the markets have generally ignored the economic data and remain focused on the European financial crisis and the results of the Greek referendum. It seems the EU is resigned that the union may be minus one member in the near future.
U.S. Treasury prices are tumbling this morning pushing the yield on the 10 year note to 2.04% Mortgage prices are worse by .25%.
Initial jobless claims for the week ending October 29 dropped to 397,000 form 406,000 the previous week. This makes just the third week of the past 29 that claims came in below 400,000. In a separate report unit labor costs fell 2.4% in Q3 as part of a 3.1% gain in productivity. This data reflects businesses are seeking to do more with the employees they have versus hiring new workers. For those of us in the mortgage space this is an obvious conclusion!
Again today the markets have generally ignored the economic data and remain focused on the European financial crisis and the results of the Greek referendum. It seems the EU is resigned that the union may be minus one member in the near future.
U.S. Treasury prices are tumbling this morning pushing the yield on the 10 year note to 2.04% Mortgage prices are worse by .25%.
Wednesday, November 2, 2011
Market commentary
Bond prices rallied sharply on Tuesday as the confidence in the Greek rescue plan continued to erode following an announcement by Prime Minister Papandreou that he would put the plan to a referendum vote. The move caught all EU leaders by surprise and rattled the markets, increasing the risk of contagion and an unraveling of the plan and the EU itself.
This morning, the ADP reported that private payrolls increased 110,000 for October versus expectations of +100,000. Friday’s government jobs report is expected to be similar with current projections for an increase of 95,000.
The big news today will be the conclusion of the Fed’s two day meeting. The markets will be looking for the Fed’s update of their economic forecast and more importantly, the possibility of QE3. The announcement will be followed by a press conference by Fed Chairman Bernanke.
Bond prices are giving back some of the gains from Tuesday with the yield on the 10 year note pushing back above 2.00% to 2.02%. Mortgage prices are worse between .125% and .255.
This morning, the ADP reported that private payrolls increased 110,000 for October versus expectations of +100,000. Friday’s government jobs report is expected to be similar with current projections for an increase of 95,000.
The big news today will be the conclusion of the Fed’s two day meeting. The markets will be looking for the Fed’s update of their economic forecast and more importantly, the possibility of QE3. The announcement will be followed by a press conference by Fed Chairman Bernanke.
Bond prices are giving back some of the gains from Tuesday with the yield on the 10 year note pushing back above 2.00% to 2.02%. Mortgage prices are worse between .125% and .255.
Tuesday, November 1, 2011
Market commentary
Just when it seems safe for financial markets to take their eyes off of Europe for a few minutes…comments late Monday from Greek Prime Minister Papandreou calling for a referendum on the proposed bailout package threw the markets and the other European countries a curve ball. This confluence of events seems to be leading the country into default, which is clearly shaking up the global stock and bond markets.
In the U.S. the October ISM Manufacturing Report showed a slight drop with the index falling from 51.6 to 50.8. However, the underlying reports on employment and new orders suggest the manufacturing sector is still treading water and staying afloat.
The markets paid no attention to the U.S. data and are clearly focused on what is happening in Europe. The yield on the 10 year note has fallen to 1.98% and mortgage prices have improved approximately .50%.
In the U.S. the October ISM Manufacturing Report showed a slight drop with the index falling from 51.6 to 50.8. However, the underlying reports on employment and new orders suggest the manufacturing sector is still treading water and staying afloat.
The markets paid no attention to the U.S. data and are clearly focused on what is happening in Europe. The yield on the 10 year note has fallen to 1.98% and mortgage prices have improved approximately .50%.
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