Anthony Hood
Equity Investment Capital
Office: 949-891-0067
Email: tony@equityinvestmentcapital.com
website: www.equityinvestmentcapital.com
Building Strong, Lasting Relationships; One Client at a Time.
Wednesday, June 23, 2010
Technically speaking, yesterday was a good day for the mortgage markets with July MBSs breaking resistance and moving to new near term high prices. The bellwether 10 yr note yield fell 9 basis points to 3.16% yesterday, but it did not break resistance at 3.16% and remains in its month-long range between 3.16% and 3.32%. Early this morning both mortgage prices and treasury prices opened slightly lower, no follow-through from yesterday. The 10 yr at 9:00 am -3/32 at 3.17%, mtg prices -3/32 (.09 bp) frm yesterday's close; the DJIA index futures +42 after dropping 149 yesterday. Today is important; if the 10 yr note and mortgages cannot advance (price) the near term outlook is for rates to increase somewhat with traders selling at the bottom of the recent yield ranges with expectations that the 10 yr may move back to the top of the recent range (3.32%).
At 9:30 the DJIA opened +20, 10 yr at 9:30 +2/32 at 3.15% -1 BP and mortgage prices -2/32 on 4.0 coupons and +1/32 on 4.5 MBS coupons.
At 10:00 May new home sales, expected to have fallen 20%, earlier this week the consensus was a decline of 14.5% but many moved estimates lower after yesterday's decline in existing home sales (-2.2%) that were widely expected to have increased. As reported new home sales collapsed! -32.7% in May to 300K (annualized) against estimates of 400K. The lowest new home sales ever going back to 1980. May was a disaster but it gets worse; April sales were revised from 504K units annualized to 446K and March revised from 439K to 389K. Based on the May sales there is an 8.5 month supply. We have warned for months that the housing sector would continue to decline, today's report is even worse than we were expecting by a wide margin.
The key for the near term interest rates and the equity markets is how the Fed frames the FOMC policy statement at 2:15 this afternoon. Will the Fed actually admit that the US and global economic outlook has weakened since the last FOMC meeting (Apr 28 and 29)? The US economy is not likely to achieve the lofty forecasts for growth that economists had expected a month or two ago; estimates for GDP growth have been revised slightly lower over the past month with Europe's economies' slowing and US consumer spending leveling off and declining fractionally. The Fed walks a tight line today; admit economic growth won't meet previous estimates or paint another mixed picture that confuses investors; we opt for the later. The Fed will try to remain optimistic as the Greenspan Fed did right up the the collapse of the housing bubble that Greenspan "didn't see coming".
At 1:00 Treasury will auction $38B of 5 yr notes in the second of three auctions this week. Yesterday the $40B 2 yr note was strong with very good demand; today the demand may be a little less but we expect it will still be a solid auction as demand for US debt continues to be strong.
Early this morning the MBA released its Weekly Mortgage Applications Survey for the week ending June 18, 2010. The Market Composite Index decreased 5.9% on a seasonally adjusted basis from one week earlier. The Refinance Index decreased 7.3% from the previous week and the seasonally adjusted Purchase Index decreased 1.2% from one week earlier. The unadjusted Purchase Index was 36.8% lower than the same week one year ago. The decline in total purchase applications was driven by a 4.4% decrease in government applications, while conventional purchase applications increased by 1.0%. The four week moving average for the seasonally adjusted Market Index is down 0.5%. The four week moving average is down 1.1% for the seasonally adjusted Purchase Index, while this average is down 0.4% for the Refinance Index. The refinance share of mortgage activity decreased to 73.8% of total applications from 74.8% the previous week. The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.75% from 4.82%, with points increasing to 1.07 from 0.89 (including the origination fee) for 80% loans. This is the lowest 30-year contract rate observed in the survey since the week ending May 15, 2009. The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.19% from 4.23%, with points increasing to 1.00 from 0.83 (including the origination fee) for 80% loans. The average contract interest rate for one-year ARMs decreased to 7.05% from 7.07%, with points remaining constant at 0.27 (including the origination fee) for 80% loans.
May new home sales were a disaster; the reaction sent the 10 yr note yield down to 3.10% 1 basis points from the reactionary low rate hit at the end of May. You cannot believe some of the chatter after the report that some of the bullish people tried to spin the May sales data. Amazing that many can't see the train coming.
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Wednesday, June 23, 2010
Wednesday, December 30, 2009
Facebook | Inbox - Market Update
Wednesday's bond market has opened relatively flat as investors prepare for today's Treasury auction. The stock markets are showing minor losses with the Dow down 13 points and the Nasdaq down 3 points. The bond market is currently up only 2/32, but due to strength late yesterday we should see this morning's mortgage rates improve by approximately .250 - .375 of a discount point.
There is no relevant economic data scheduled for release today, however, we do have the 7-year Treasury Note auction to watch. Yesterday's 5-year Note sale was met with an average demand at best, so today's 7-year sale is not expected to draw a great deal of interest. It is apparent that many traders and market participants are simple wrapping up loose ends as the year comes to a close. That will likely prevent a significant reaction to the sale results when they are posted at 1:00 PM today. This could be good news for bonds and mortgage rates since yesterday's sale and Monday' s less important 2-year auction were not overly strong.
I believe that the year-end selling in bonds appears to be over. The negative tone of the past two weeks seems to have disappeared, which allowed rates to improve late yesterday. Accordingly, I am more optimistic about mortgage rates improving in the immediate future, at least until the holiday schedule is behind us and we get next week's important economic data.
There is no relevant economic news scheduled for release tomorrow except for weekly unemployment figures. The Labor Department is expected to announce that 460,000 new claims for benefits were filed last week. This would be an increase from the previous week, but unless we see a large variance I don't think this data will have much of an impact on mortgage rates.
The bond market will close at 2:00 PM ET tomorrow and all of the U.S. financial markets will be closed Friday in observance of the New Year's Day holiday. They wil l reopen for regular hours next Monday morning.
If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
There is no relevant economic data scheduled for release today, however, we do have the 7-year Treasury Note auction to watch. Yesterday's 5-year Note sale was met with an average demand at best, so today's 7-year sale is not expected to draw a great deal of interest. It is apparent that many traders and market participants are simple wrapping up loose ends as the year comes to a close. That will likely prevent a significant reaction to the sale results when they are posted at 1:00 PM today. This could be good news for bonds and mortgage rates since yesterday's sale and Monday' s less important 2-year auction were not overly strong.
I believe that the year-end selling in bonds appears to be over. The negative tone of the past two weeks seems to have disappeared, which allowed rates to improve late yesterday. Accordingly, I am more optimistic about mortgage rates improving in the immediate future, at least until the holiday schedule is behind us and we get next week's important economic data.
There is no relevant economic news scheduled for release tomorrow except for weekly unemployment figures. The Labor Department is expected to announce that 460,000 new claims for benefits were filed last week. This would be an increase from the previous week, but unless we see a large variance I don't think this data will have much of an impact on mortgage rates.
The bond market will close at 2:00 PM ET tomorrow and all of the U.S. financial markets will be closed Friday in observance of the New Year's Day holiday. They wil l reopen for regular hours next Monday morning.
If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Tuesday, December 29, 2009
Credit card bills have you down???
Credit card bills have you down???
Debt Management programs are designed to get you out of debt up to 75% faster by reducing, and in a lot of cases completely eliminating the interest rates on your debt. This way, most of your money goes to paying down your principle instead of the interest. Have you ever noticed how little of your payments actually goes toward the principle? Did you know, when only paying your minimums, it takes approximately 6 years for every $3000 you're in debt to eliminate the balance?
When done properly consolidating your debts has no negative impact on your credit score because it reduces your debt to income ratio and is not viewed as a hardship program like Debt Negotiation or Bankruptcy.
Interest rate reduction programs were created by the creditors to recapture principle that would otherwise be at risk due to Bankruptcy or Debt Negotiation. People like you can take advantage of them without hurting your credit while significantly improving your financial situation. This way the creditors can recapture 100% of their principle and you can get out of debt a lot faster. Does this sound like what you are looking for?
Call now for your free financial analysis!!
Anthony J. Hood
Equity Investment Capital
866-532-1744
tony@equityinvestmentcapital.com
www.equityinvestmentcapital.com
Debt Management programs are designed to get you out of debt up to 75% faster by reducing, and in a lot of cases completely eliminating the interest rates on your debt. This way, most of your money goes to paying down your principle instead of the interest. Have you ever noticed how little of your payments actually goes toward the principle? Did you know, when only paying your minimums, it takes approximately 6 years for every $3000 you're in debt to eliminate the balance?
When done properly consolidating your debts has no negative impact on your credit score because it reduces your debt to income ratio and is not viewed as a hardship program like Debt Negotiation or Bankruptcy.
Interest rate reduction programs were created by the creditors to recapture principle that would otherwise be at risk due to Bankruptcy or Debt Negotiation. People like you can take advantage of them without hurting your credit while significantly improving your financial situation. This way the creditors can recapture 100% of their principle and you can get out of debt a lot faster. Does this sound like what you are looking for?
Call now for your free financial analysis!!
Anthony J. Hood
Equity Investment Capital
866-532-1744
tony@equityinvestmentcapital.com
www.equityinvestmentcapital.com
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