Stocks put in a decent day Thursday, as did U.S. Treasuries. The yield on the 10 year note fell 2 basis points to 1.90%. So far this morning, the start of the last trading day of 2011, stocks and bonds are both flat, and remember, the bond market will close early today. The HSOA lock desk will close at 12 noon, Pacific Time.
We at Home Savings wish you, our partners, a Happy and Prosperous New Year!
Friday, December 30, 2011
Thursday, December 29, 2011
Market commentary
Concern about the solvency of several European banks and the continued high yields many European countries have to pay to refinance or issue new debt is again taking its toll on the markets. This was the driver pushing U.S. Treasury yields lower on Wednesday.
Today brings the last real economic data for the year, beginning with initial jobless claims for the week ending December 24 rising from 366,000 to 381,000. While the figures reflect a 15,000 jump in initial claims, 381,000 is still well below 400,000 and continues to point to an improving labor market.
In a sign American manufacturing is weathering the slowdown in Europe; the Institute for Supply Management-Chicago Inc. said today its business barometer decreased slightly to 62.5 from 62.6 in November. Most analysts had expected a more pronounced decline, and recall readings above 50 signal growth.
And finally, the number of Americans signing contracts to buy previously owned homes rose 7.3% in November, more than forecast as falling prices and low borrowing costs boosted demand. I think most of us agree now is a great time to buy a home, assuming one is secure in their job and source of income, and can produce the documentation to qualify for a loan!
Pricing for mortgages are flat from the close on Wednesday.
Today brings the last real economic data for the year, beginning with initial jobless claims for the week ending December 24 rising from 366,000 to 381,000. While the figures reflect a 15,000 jump in initial claims, 381,000 is still well below 400,000 and continues to point to an improving labor market.
In a sign American manufacturing is weathering the slowdown in Europe; the Institute for Supply Management-Chicago Inc. said today its business barometer decreased slightly to 62.5 from 62.6 in November. Most analysts had expected a more pronounced decline, and recall readings above 50 signal growth.
And finally, the number of Americans signing contracts to buy previously owned homes rose 7.3% in November, more than forecast as falling prices and low borrowing costs boosted demand. I think most of us agree now is a great time to buy a home, assuming one is secure in their job and source of income, and can produce the documentation to qualify for a loan!
Pricing for mortgages are flat from the close on Wednesday.
Wednesday, December 28, 2011
Market commentary
The week between Christmas and New Years Day is always quiet and with no economic data today, one would expect quiet trading. However, on relatively light volume we see U.S. Treasuries in rally mode pushing the yield on the 10 year note from 2.005 down to 1.935%. The good news for mortgage borrowers is that pricing has improved by .375% from Tuesday.
Remember, this is a holiday shortened week for the bond market with an early close on Friday.
Remember, this is a holiday shortened week for the bond market with an early close on Friday.
Tuesday, December 27, 2011
Market commentary
Housing prices fell in October according to the S&P CaseShiller report released this morning, bringing the year-over-year price decline to 3.40%. The only metropolitan area reporting an increase was Phoenix, with the biggest drops coming in Atlanta, Detroit, and Minneapolis.
The report noted that foreclosures had a significant impact on prices and that the supply of those homes remains pretty high in parts of the country. Clearly the sooner foreclosure inventories are absorbed; it will eventually lay a foundation for a more healthy housing market. One wonders if regulators and politicians realize this, as servicers struggle to clear the backlog of delinquent mortgages and properties in foreclosure.
On a more positive note, according to the Conference Board its index of consumer confidence increased to 64.5, the highest reading since April of this year. The boost in confidence is attributed to the positive trend reported in the unemployment numbers for the past two months.
After this morning’s data the stock and bond markets are trading relatively unchanged from the close on Friday. Mortgage prices, however, are worse by .25%.
The report noted that foreclosures had a significant impact on prices and that the supply of those homes remains pretty high in parts of the country. Clearly the sooner foreclosure inventories are absorbed; it will eventually lay a foundation for a more healthy housing market. One wonders if regulators and politicians realize this, as servicers struggle to clear the backlog of delinquent mortgages and properties in foreclosure.
On a more positive note, according to the Conference Board its index of consumer confidence increased to 64.5, the highest reading since April of this year. The boost in confidence is attributed to the positive trend reported in the unemployment numbers for the past two months.
After this morning’s data the stock and bond markets are trading relatively unchanged from the close on Friday. Mortgage prices, however, are worse by .25%.
Friday, December 23, 2011
Market commentary
Durable goods orders for the month of November rose 3.8%, well above the expected increase of 2.2%. However, most of the increase came from aircraft orders, so ex-transportation, orders for rose just 0.3%.
Personal income and spending both disappointed for the month of November. Both measures rose just 0.1%, which means when adjusted for inflation, income is declining. This highlights the inadequacy of the unemployment rate as an indicator of actual spending and is one of the reasons economic growth will be muted in 2012.
On a positive note, new home sales increased 1.6% in November to a seven month high. Bond prices had trailed off slightly prior to the housing data, but the unexpected jump pushed prices sharply lower. The yield on the 10 year note has risen above 2.00% to yield 2.03%, while mortgage prices are worse by .375%.
The bond market has an early close today and the HSOA lock desk will be closing at 12 noon, Pacific Time.
Personal income and spending both disappointed for the month of November. Both measures rose just 0.1%, which means when adjusted for inflation, income is declining. This highlights the inadequacy of the unemployment rate as an indicator of actual spending and is one of the reasons economic growth will be muted in 2012.
On a positive note, new home sales increased 1.6% in November to a seven month high. Bond prices had trailed off slightly prior to the housing data, but the unexpected jump pushed prices sharply lower. The yield on the 10 year note has risen above 2.00% to yield 2.03%, while mortgage prices are worse by .375%.
The bond market has an early close today and the HSOA lock desk will be closing at 12 noon, Pacific Time.
Thursday, December 22, 2011
Market commentary
Positive economic data across the board this morning began with initial jobless claims for the week ending December 17, which fell from 368,000 to 364,000. This is the lowest level for initial jobless claims since April 2008.
The Thomson Reuters/University of Michigan index of consumer confidence rose to 69.9 from 64.1 at the end of November. As a reference point, this index averaged 89 in the five years leading up to the recession that began in December 2007.
And finally, the Conference Board reported its index of Leading Indicators (LEI) rose 0.5% after a 0.9% October increase. The LEI index is an indication of how well the U.S. economy will perform over the next 3 to 6 months.
On this data U.S. stocks are trading slightly higher as are Treasuries. U.S. Treasuries had tough day on Wednesday, and are struggling to maintain this morning’s gains. Mortgage pricing is better by .125%.
The Thomson Reuters/University of Michigan index of consumer confidence rose to 69.9 from 64.1 at the end of November. As a reference point, this index averaged 89 in the five years leading up to the recession that began in December 2007.
And finally, the Conference Board reported its index of Leading Indicators (LEI) rose 0.5% after a 0.9% October increase. The LEI index is an indication of how well the U.S. economy will perform over the next 3 to 6 months.
On this data U.S. stocks are trading slightly higher as are Treasuries. U.S. Treasuries had tough day on Wednesday, and are struggling to maintain this morning’s gains. Mortgage pricing is better by .125%.
Wednesday, December 21, 2011
Market commentary
U.S. stocks had a stellar day Tuesday to the detriment of the bond market. Yields rose across the board with the 10 year rising 12 basis points to close at 1.92%---it is trading at 1.94% this morning.
Another report showing improvement in the housing sector came from the National Association of Realtors telling us existing home sales rose 4.0% in October. This on the heels of Tuesday’s increase in housing starts and building permits.
Europe is back in the news as the ECB offered banks 490 billion Euros in loans in continued efforts to provide liquidity and ease the fears of a credit crunch. This helped provide a short-lived stimulus to the markets; however, as of this writing U.S. stocks are in the process of giving back some of Tuesday’s gains while Treasuries have risen slightly. Mortgage prices are worse by .125%.
Another report showing improvement in the housing sector came from the National Association of Realtors telling us existing home sales rose 4.0% in October. This on the heels of Tuesday’s increase in housing starts and building permits.
Europe is back in the news as the ECB offered banks 490 billion Euros in loans in continued efforts to provide liquidity and ease the fears of a credit crunch. This helped provide a short-lived stimulus to the markets; however, as of this writing U.S. stocks are in the process of giving back some of Tuesday’s gains while Treasuries have risen slightly. Mortgage prices are worse by .125%.
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