The Fed will purchase between $4 and $5 billion in 5 to 7 year Treasuries today in its final QE2 purchases, and will continue to reinvest cashflows from its portfolio but will not be making anymore new money purchases.
For the week ending June 25, initial jobless claims came in at 428,000, down 1,000 from the previous week’s 429,000; however, expectations were for claims to fall to 420,000. Jobless claims are not easing as economists continue to project, reflecting a struggling economy that is unable to produce jobs.
Mortgage prices are worse this morning by .25% to .375%, but are still extremely low. 30 year fixed rate loans remain in the mid 4% range.
Thursday, June 30, 2011
Wednesday, June 29, 2011
Market commentary
The flight to quality which has seen Treasuries rally for the past several weeks on Greek concerns is being undone. The yield on the 10 year note rose 11 basis points Tuesday and its yield is higher again this morning, currently trading at 3.09%. Treasury had another lackluster auction yesterday of 5 year notes which revealed weaker foreign demand; a concern particularly given the need for buyers to step in and fill the Fed’s role once QE2 concludes. This put additional pressure on bonds with the 5 year note taking the biggest beating yesterday, rising 15 points in yield. Keep in mind Treasury is auctioning 7 year notes today.
Stocks have had two stellar days and are higher again this morning, and oil prices have rebounded to now trade above their price level when the IEA and the U.S. announced the release of 60 million barrels of oil from reserves. Who did not see that coming?
Mortgage pricing is worse again today by approximately .125%.
Stocks have had two stellar days and are higher again this morning, and oil prices have rebounded to now trade above their price level when the IEA and the U.S. announced the release of 60 million barrels of oil from reserves. Who did not see that coming?
Mortgage pricing is worse again today by approximately .125%.
Tuesday, June 28, 2011
Market commentary
Bonds had a bad day Monday, the result of a weak 2-year note auction. Immediately following the auction, which had weaker-than-normal demand from overseas buyers, the yield on the 10-year note rose from 2.88% to 2.92% and is opening this morning at 2.94%.
Greece is once again the focus of the markets as widespread protests against tax hikes and spending cuts show how tough a deal to bailout Greece will be. In addition to Greece, Italy and Spain are making news. In a little reported event, trading was halted last Friday in two of Italy’s largest banks.
Housing data this morning told us the spring buying season helped support prices in several areas, according to the S&P/CaseShiller price index. The May report reflects this, rising 0.7% month-over-month in May. However, after seasonal adjustments, prices fell 0.09%, telling a recovery in housing is somewhere in the future.
Greece is once again the focus of the markets as widespread protests against tax hikes and spending cuts show how tough a deal to bailout Greece will be. In addition to Greece, Italy and Spain are making news. In a little reported event, trading was halted last Friday in two of Italy’s largest banks.
Housing data this morning told us the spring buying season helped support prices in several areas, according to the S&P/CaseShiller price index. The May report reflects this, rising 0.7% month-over-month in May. However, after seasonal adjustments, prices fell 0.09%, telling a recovery in housing is somewhere in the future.
Monday, June 27, 2011
Maarket commentary
This week provides a full economic calendar and more debt auctions from the U.S. Treasury, beginning today with 2 year notes, followed by 5 year notes and 7 year notes, Tuesday and Wednesday, respectively.
This morning we saw data on personal income and spending which reflected stagnant consumer spending and slowing growth in personal incomes. The remainder of the week will give us data on housing prices and the health of the U.S. industrial sector.
Of course the Greek debt crisis remains front and center and is the main focus of markets again today. The fear of a global economic slowdown is growing resulting in stock market losses, falling commodity prices, including oil, and lower interest rates.
This morning U.S. Treasuries opened flat from the close on Friday, offering another opportunity to take advantage of low mortgage rates.
This morning we saw data on personal income and spending which reflected stagnant consumer spending and slowing growth in personal incomes. The remainder of the week will give us data on housing prices and the health of the U.S. industrial sector.
Of course the Greek debt crisis remains front and center and is the main focus of markets again today. The fear of a global economic slowdown is growing resulting in stock market losses, falling commodity prices, including oil, and lower interest rates.
This morning U.S. Treasuries opened flat from the close on Friday, offering another opportunity to take advantage of low mortgage rates.
Friday, June 24, 2011
Market commentary
Durable goods orders for the month of May rose 1.9%, slightly more than the expected increase of 1.5%. Recall in April this report reflected a decline in orders of 2.7%. The positive number today reduces the growing concern that manufacturing is headed for a serious slowdown.
Thursday morning stocks opened down sharply creating a nice rally in U.S. Treasuries. The yield on the 10 year note fell below 2.90% in intraday trading and closed at 2.915%, while the DOW was lower by almost 200 points and closed down 60 points. Mortgage prices improved between .375% and .50%.
This morning stocks are again trading lower as are bonds. Mortgage pricing is slightly worse, however, at current interest rates this remains an exceptional time to purchase or refinance.
Thursday morning stocks opened down sharply creating a nice rally in U.S. Treasuries. The yield on the 10 year note fell below 2.90% in intraday trading and closed at 2.915%, while the DOW was lower by almost 200 points and closed down 60 points. Mortgage prices improved between .375% and .50%.
This morning stocks are again trading lower as are bonds. Mortgage pricing is slightly worse, however, at current interest rates this remains an exceptional time to purchase or refinance.
Thursday, June 23, 2011
Market commentary
Fear is gripping the stock market this morning after initial jobless claims for the week ending June 18 came in at 429,000, 14,000 higher than expectations. This is the eleventh consecutive week that claims have been above 400,000, a bad sign for the labor market. Additionally, European Central Bank President Jean-Claude Trichet said earlier today that risk signals for financial stability in the euro zone are "flashing red" in response to the Greek crisis.
The FOMC meeting that concluded yesterday yielded some interesting comments from Fed Chairman Bernanke: 1) economic forecasts for 2011 and 2012 were downgraded and Bernanke said that at least part of the economic weakness was not temporary, 2) Bernanke said he could not explain the slowdown completely although part of it was attributable to Japan and oil prices,… Chairman Bernanke had very few answers for how to stimulate the housing market, and as one commentator wrote, “Chairman Bernanke seemed befuddled with the current economic situation”. One of the few certainties we can take from yesterday is that the Fed is nowhere near ready to raise their target funds rate.
I only wish these folks would ask me for my top three ideas for turning the U.S. economy around. I am sure my ideas are replicas of the thoughts many of you folks have.
For today, bond yields are falling, with the 10 year note now trading at 2.91%.
The FOMC meeting that concluded yesterday yielded some interesting comments from Fed Chairman Bernanke: 1) economic forecasts for 2011 and 2012 were downgraded and Bernanke said that at least part of the economic weakness was not temporary, 2) Bernanke said he could not explain the slowdown completely although part of it was attributable to Japan and oil prices,… Chairman Bernanke had very few answers for how to stimulate the housing market, and as one commentator wrote, “Chairman Bernanke seemed befuddled with the current economic situation”. One of the few certainties we can take from yesterday is that the Fed is nowhere near ready to raise their target funds rate.
I only wish these folks would ask me for my top three ideas for turning the U.S. economy around. I am sure my ideas are replicas of the thoughts many of you folks have.
For today, bond yields are falling, with the 10 year note now trading at 2.91%.
Wednesday, June 22, 2011
Market commentary
The markets are focused entirely on the FOMC (Fed) meeting which will conclude at 12:30 PM, ET, 9:30 AM, PT. This Fed meeting is ending earlier than usual as Chairman Benanke will once again host a post meeting news conference. U.S. stock markets are trading flat while bond prices have improved slightly. Mortgage prices have improved by .125% to .25%.
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