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Wednesday, November 26, 2014

Mortgage Bond Market Analysis - The Day Before Thanksgiving edition

Happy Hump Day and more importantly, Happy Thanksgiving.  There was a fair amount of data released today including the jobless claims numbers (which were not on the list to be released).  Here's how everything shook out:  Durable Goods orders ex-transportation were -.9 vs. expected of .5 and previous of .2 but the overall durable goods orders number came in at .4% vs. expectations of -.6% .  Chicago Purchasing Manager's Index came in below expectations at 60.8 vs. expected of 63 and previous of 66.2 (anything over 50 shows growth).  The Michigan Consumer Sentiment reading came in at 88.8 (highest final reading in 7 years) but below expectations of 90 and above the previous reading of 86.9.  Weekly jobless claims came in at 313K vs. expectations of 288K - this is a big miss and is the first time over the 300k level in about 10 weeks.

Personal spending came in at .2% vs. .4% and New Home Sales (MOM) came in at .7 vs. expectations of .4.  New Home Sales came in at 458 vs. 470 expected and previous of 455.  Pending home sales (MOM) were down 1.1 vs. expectations of increasing .5.  And that is all of this morning's data.  Here's a look at the chart:

With all of that data and not a lot of tradas (I went for the lame rhyme), the benchmark FNMA bond is currently up 12 basis points and is slightly above the new 2nd level of resistance of 104.00 at 104.06.  The RSI is still overbought but the bias may be changing a bit since it's a little lower than yesterday.  It's a great time to lock.  Additionally, you could float if you have the time but always keep a sharp eye on the market and hope that your loan officer watches it closely as well - or you can use me as your loan officer because I watch the market closely as well as doing lots of other things.  At any rate (pun intended) have a happy and safe Thanksgiving.  If you need an approval or have any questions regarding mortgages, I will have my laptop with me and can help out as needed - 702-812-1214.

Tuesday, November 25, 2014

Mortgage Bond Market Analysis - Can't wait for Thanksgiving edition

Happy Tuesday morning.  We have a mixed bag of data.  The FNMA benchmark bond is currently down 5 basis points (probably a little profit-taking) on a number of data points.  The first to hit was GDP which came in at 3.9 vs. expectations of 3.3 and previous of 3.5.  This news which shows a decent economy (in spite of a week job market) was then offset by the consumer confidence numbers which came in FAR below expectations (96) at 88.7 (it was also below the previous of 94.1).  Additionally, the Richmond Fed Manufacturing Index came in at 4 vs. estimates of 16.5 and a previous of 20 - this is a HUGE miss.  The Case-Schiller Home Price index came in at 4.9 which was a bit above expectations of 4.6 and below the previous month's reading of 5.6.

The Relative Strength Index (RSI) is overbought so there is a signal for investors to sell in the face of some mixed data.  Here's the chart:

There's another cornucopia of data coming out tomorrow with durable goods orders, Chicago Purchasing Manager's Index, University of Michigan's Consumer Sentiment Index, Pending Home Sales and New Home Sales.  They can all have an influence on the bond market but the jobs data points are still by far the most influential and since Thursday is a holiday, we won't get our biggest report of the week:  initial and continuing jobless claims.  Next week will provide us with not only the regular Thursday jobless claims reports but since it will have the 1st Friday of the month, we will also get the employment report - these reports will be skewed with some holiday employment numbers figured in so it will make it more difficult for traders to decipher the true information.

Feel free to contact me if I can help with anything mortgage-related - 702-812-1214 - but for now you're probably o.k. to float if your loan isn't closing for a few weeks; if you are closing within 15 days, I'd take advantage of these great rates.  As always, make sure you keep your finger on the pulse because the market can move against you quickly so it's important to work with a loan officer who can react quickly.  Make it a great day.

Monday, November 24, 2014

Mortgage Bond Market Analysis - Monday morning holiday week edition

Good morning and HAPPY Monday.  Holiday weeks like Thanksgiving usually have light trading in both the stock and bond markets as traders often take advantage of the built-in holidays to take a vacation.  With no economic news and a rather narrow trading range - probably because of light volume as well as no data - the FNMA benchmark bond is up 2 basis points as I write this.

The Relative Strength Index is approaching overbought which means investors my start thinking about selling.  If you've read my blog before, you know that selling mortgage (or any) bond pushes the price down and rates up since price and yield / rate move inversely.  There is a fair amount of data on docket for tomorrow with GDP, Case-Schiller, Richmond Fed Manufacturing Index and Consumer Confidence.  I expect that investors, at least those that are working today, are waiting for some direction from tomorrow's (and Wednesday's) data.  Here's today's chart:

Well a quick check on the benchmark bond before I sign off for the day revealed some improvement as it is now up 11 basis points.

What are you doing for Thanksgiving?  Are you traveling or staying home?  Do you have some fun traditions?  Please share in the comments section.  I'm heading to my sister-in-laws to be with lots of family.  Can't wait to see my nieces and nephews and relax with the fam playing games and EATING.  Be safe and feel free to contact me if I can help with anything mortgage-related - I'll have my laptop.  702-812-1214.  Happy Thanksgiving.

Friday, November 21, 2014

Mortgage Bond Market Analysis - Friday with no economic news edition

TGIF.  Do you have some good plans for the weekend?  My alma mater (the University of Utah) has a basketball game tonight and a football game tomorrow so I'll be enjoying those games in addition to watching my son play in his 8th grade AAU games tomorrow night.

The benchmark bond is having some follow-through from yesterday's solid close; it's currently up 8 basis points (3 basis points off of its high for the day).  There is no economic news today so investors are playing a guessing game about where the economy is headed from here.  From a technical standpoint, the benchmark bond is not overbought but it is trying to break through the 2nd resistance level and I doubt it will do that with any impunity today since there's nothing to drive it - barring some big geopolitical event.  Here's the chart:

There is no data released on Monday but Tuesday and Wednesday both have a full plate (reference to Thanksgiving).  We won't get the jobless claims number on Thursday because of the holiday and then only the Chicago Purchasing Manager's Index is released on Friday - which will be a light trading day (along with Wednesday) anyway.  Light trading days are usually more volatile (almost always more volatile).  The big news to watch out for after the Thanksgiving week is going to be the results of Black Friday.  If the consumers are out in droves spending lots of money for the Christmas season then the benchmark bond (as well as other bonds) will likely sell off (especially if the economic data is good) thinking that this is one more sign of a recovery.

It's time for my ride.  Please like, comment and share and feel free to contact me if I can help with anything mortgage-related - 702-812-1214.  Make it a great weekend.

Thursday, November 20, 2014

Mortgage Bond Market Analysis - week before Thanksgiving edition

Happy Thursday to you.  Data came out today like stuffing out of a turkey (yeah, I love Thanksgiving and can't wait for the dinner).  Existing home sales came in at 5.26m vs. estimates of 5.16 which is bad for the benchmark bond (and rates).  Leading Economic Indicators came in at .9% vs. estimates of .6% and the biggie was the Philly Fed business outlook was 40.8 vs. estimates of 18.3 - all bad for the benchmark bond.

On the flip side, initial jobless claims came in at 291k vs. estimates of 285k.  While the job market isn't where it needs to be, as long as claims are under 300k, that is basically good.  That said, it is weaker than expected and there is still trouble in Europe so that is helping our cause today.  The benchmark bond is currently 14 basis points off its high but is still up 16 basis points from yesterday's close at 103.47 - 1 basis point above the 1st level of resistance.  Here's the chart:

There is no economic data on docket for tomorrow and next week will be a light trading week with the holiday which means that any news, good or bad, will likely be amplified.  It's a great day to lock but there's nothing wrong with floating just as long as you can keep your finger on the pulse and be ready to lock just in case something big happens and the market moves against you.  Please feel free to share your thoughts in the comments section.  Make it a great day.

Wednesday, November 19, 2014

Mortgage Bond Market Analysis - hooray for building permits edition

Happy humpday morning to you!!  After today, we'll be on the down side to the weekend so that's our consolation prize to a crappy morning for the bond market.  The housing starts numbers were good for the bond market, relatively speaking, since they were a miss with the actual at 1009 vs. expectations of 1025 and previous of 1038.  What's punching us in the gut this morning is the building permit number which came in at 1080 vs. expectations of 1040 and previous of 1031.  The future is looking up - as far as building is concerned and that's good for our industry since it means people are buying homes (resale as well) but when the economy improves, rates go up.

As I write this, the benchmark bond has improved a little bit vs. what you'll see on the chart; it is currently only down 15 basis points which means it is up 16 basis points off the low and is now 9 basis points above the first level of support.  Here's the chart:

Finally, here is an article from the DS News about where Freddie Mac's economists see housing and interest rates heading in 2015 based on their estimations for the broader economy:  Analysts predict continued improvement for housing.

Please feel free to share your thoughts as well as share the article with your friends and associates.  I'm available to help with anything mortgage related - 702-812-1214.  Make today great.

Tuesday, November 18, 2014

Mortgage Bond Market Analysis - pedaling against the wind

Their was good news on the economic front this morning yet the benchmark bond is up 13 basis points as of this writing in spite of it.  PPI MOM was up .2 vs. expectations of -.1 and ex-food and energy it was up .4 vs. .1.  Normally when important data far exceeds expectations, you would expect the benchmark bond to sell off driving rates higher but the bond market showed its resiliency this morning by shrugging off that data and inching higher.  At 103.52 it's 6 basis points above the 1st level of resistance.

Tomorrow's data brings us building permits and housing starts followed by the initial and continuing jobless claims on Thursday - all of these data points can influence bond prices but the jobless claims have the biggest potential to move the market.  With the start of the holiday shopping season nearing (or even started for some of you), seasonal hiring has begun so the employment and jobless claims numbers will be skewed for the next couple of months. Here's today's chart:

Please feel free to comment, like and share and to contact me if I can help with anything mortgage related:  702-812-1214.  I'm licensed in Nevada, Utah and California.

Friday, November 14, 2014

Mortgage Bond Market Analysis - TGIF edition

Good morning and happy Friday.  The benchmark bond has shrugged off the early morning propensity to sell which was driven by better-than-expected economic data.  Investors are pushing bond prices higher, albeit slightly.  It is currently up 6 basis points and is hovering above both the 1st level of resistance as well as the 10 day moving average.  Closing above these levels might indicate a possibility of some follow through on Monday; of course we had a nice Friday last week and did an about face on Monday so sometimes momentum works and sometimes it doesn't.  Here's the chart:

It's a good time to lock if you have a loan closing soon but if you have some time, I wouldn't be afraid to float heading into Monday.  If you do float, make sure you stay on top of the market so that you can lock quickly if it turns against you.

Please feel free to share your thoughts in the comments section and share this with your friends as well as like and subscribe.  Make it a great weekend.

Thursday, November 13, 2014

Mortgage Bond Market Analysis - and other related news

So what the heck is going on in the mortgage bond market this morning?  To start with, the initial jobless claims came in 10K higher than expected at 290K.  While this is positive for the benchmark bond, it's not that big of a miss and the overall claims are still good as far as the economy is concerned - anything below 300K is good.  The fact that New York Fed President Dudley spoke this morning and expressed his thoughts that the Fed should wait to raise rates is probably the biggest impetus as to why we are experiencing some buying of the benchmark bond which is good for rates.

From a technical standpoint, the benchmark bond is really looking for direction.  The economic date from Europe is horrible and investors aren't really confident in a recovery (especially as far as jobs is concerned) over here but the stock market continues to set record highs nearly every day as of late so there is confusion on whether to buy or sell.  Yesterday the bond buying started off strong but the sellers won the day with the benchmark bond closing down 10 basis points.  This morning we saw a moderate open which then sold off and is now flirting with the 1st level of resistance again.  Rates continue to be great and it's always a good time to lock when bond prices are up.  Here's the chart:

Is the 3% down payment conventional loan coming back?  While nothing has been announced, there was an article in talking about how the U.S. Mortgage Insurance trade association believes that the 97% LTV conventional loan is a good loan and should be available to the home-buying public.  They give four reasons as to why they believe this - they left out the obvious 5th reason - more profits for them.  Here's the article:  Low down payment home loans.

I'd love for you to share your thoughts on any of these items.  Please like and share my post as well.  If you know someone who is self-employed and making good money but doesn't show it on the tax returns, we may have a solution with our bank-statement program.  Feel free to contact me for anything mortgage related:  70-812-1214.

Wednesday, November 12, 2014

Mortgage Bond Market Analysis

It's another quiet day for economic data and we are seeing a bit of a rebound from Monday's 31 basis point beating - a day with NO data.  Today we have wholesale inventories which came in at .3 vs. expectations of .2 and previous of .6.  This has little to no effect on the mortgage bond market.  The benchmark bond (the FNMA 3.5) is currently up 7 basis points which is 22 basis points off it's high for the day.  On the government side, the GNMA 3.5 is up 40 basis points which is 11 basis points off its high for the day.

Like I always say, rates are great.  Tomorrow we will get the jobless claims numbers (initial and continuing) and I'm guessing that these numbers will come in relatively strong since those who may have otherwise had to file unemployment claims will have found seasonal employment.  Going forward, all employment numbers will be skewed because of the temporary seasonal employment so it will be hard to get an accurate read on how the labor market is actually doing until early 2015.  That said, employment data could still move the market so you may want to lock ahead of the release (5:30 a.m. PST tomorrow morning) if you want to be safe.  Here is the chart:

An article from talks about some demographics of people purchasing homes and the interesting part addresses the millennials (18-33) who are showing reluctance to get into the housing market.  It's a good read and may be something to think about with regard to some marketing ideas:  Millennials Still Grapple With First-time Homebuying.

Please feel free to share your thoughts in the comments section as well as to like and share the post.  Contact me if I can help with anything mortgage-related:  702-812-1214.  Make it a great day.

Friday, November 7, 2014

Mortgage Bond Market Analysis - Friday edition

Non-farm payrolls disappointed which is REALLY good for the benchmark bond.   They came in a a relatively wimpy 214K vs. estimates of 231K and previous of 256K.  This shows that the economic recovery continues to be very lethargic.  This is the first big move for the benchmark bond since October 15th.  It is also no longer oversold.  Where we go from here (even just for the day) is anybody's guess.  Is there enough momentum to push it to an even higher close or do investors sell off such that it closes up marginally?  How it closes could give us some insight to what may happen next week.

For those who rolled the dice on this one and waited to lock until after the data came out, you got a reward.  For those who locked prior to the data, you still got a great rate and you may be able to float down at some point depending on your lenders float down policy.  Of course, you can always call me and see what kind of rate I can get you - 702-812-1214.  Here's today's chart:

By the time I copied the chart there was a 6 basis point sell-off - no big deal unless it's the start of a bigger sell-off.  At the current price of 103.59 it is only 21 basis points below the October 15th close.  Today would be a great day to lock if you have a loan closing soon but if you have some time, you might want to float into next week and see if we get some follow-through.  If you decide to float, make sure you are judicious about checking on rates so that you don't get hit with a big down day that erases all of the gains - sometimes that can't be anticipated but sometimes if you catch it in time, you can lock before a your lender has a price change.  The key is for your loan officer to have access to the mortgage bond market so that he gets alerts as to price swings.

I'll be up in Utah through Tuesday so I may not be able to post anything on Monday and Tuesday.  Please feel free to share your thoughts in the comment section.  Please like, share and subscribe.  Make it a great day and a better weekend.  Utah is playing Oregon in college football tomorrow night - I hope the Utes will give them a respectable game and MAYBE pull of a big upset.

Wednesday, November 5, 2014

Mortgage Bond Market Analysis

ADP Private Payrolls came in at 230K vs. expectations of 220K.  This is causing investors to sell which is pushing rates slightly higher.  The support and resistance levels have been adjusted downward through this slow downturn and the benchmark bond is still oversold although it looks like the bias might be changing.  If this happens and investors believe it then there could be some serious selling.

Thursday and Friday should give us more insight as to the employment portion of the recovery - if jobless claims are down tomorrow and non-farm payrolls are up on Friday, expect a couple more days of selling.  Any big surprises could move the market in a big way.  Depending on your tolerance for risk, you may want to lock your rate today in advance of the data releases tomorrow and Friday. Here's today's chart:

It's important to remember that even though we've had a steady decline over the last 15 trading days, bond prices are still strong which means rates are still really great even from a short term perspective.  Of course if you look at it from a historical perspective, rates are incredibly low.  If it would me, I wouldn't be greedy and I 'd lock today but the decision is always up to you.

Please feel free to share your thoughts on the subject.  Please like, subscribe and share.  Make today great.

Tuesday, November 4, 2014

Mortgage Bond Market Analysis - Election Day Edition

It's election day and that means one thing - another edition of my mortgage bond market analysis.  As I write this, the benchmark bond is up 5 basis points after closing down 12 basis points yesterday.  It has retreated 51 basis points since the close on October 15th - again this has been a very slow decline and the benchmark bond is oversold.

Tomorrow we will start to see the tip of the iceberg with the typically inaccurate ADP private payrolls.  We follow that up with the jobless claims numbers on Thursday and then the monthly non-farm payroll / employment report.  This report may be the beginning of including some seasonal workers so it may not be as accurate as we would like.  If numbers come in higher than 231 there could be some sell-off pushing rates higher.  If the numbers really surprise and are higher than last months 248, the sell-off could be substantial - at least relatively speaking.  With the small movements that we've had, I think the bond market is looking for some direction; it's hard to believe that it's oversold (even though it technically is) having only gone down 51 basis points over the last 14 trading sessions (including today) which is just 4 basis points per day.  Here's the chart:

I would contemplate locking before the end of today if you are ultraconservative and are afraid of what might happen to rates depending on what happens in the elections.  If you are moderately conservative, I'd at least lock before Thursday's jobless claims numbers.  If you are neutral then you may want to lock by Thursday's close to be ahead of Friday's employment numbers which come out early.  If you like to live on the edge, lock after the employment numbers are released.  I wish I had a crystal ball but that's as good as it gets - remember that the market is oversold so there could be a desire for investors to buy.  That said, there could be nothing but good news economically which would be bad for rates.  It's always your call.

Please feel free to share your thoughts in the comments section below.  Please like, share and subscribe and make it a great day.

Monday, November 3, 2014

Mortgage Bond Market Analysis - Happy November Edition

The mortgage bond market is off to a rocky start this month with the benchmark bond currently down 14 basis points on the day at 103.22 and 58 basis points over the last 13 trading days.  The benchmark bond is oversold and could get a lift from investors who may start to believe that this is a good buying opportunity - I'm not confident that will happen since I believe it is oversold more because of the prolonged decline not because of how much it has declined.  Considering how big the run-up was, I think we could break through some support levels especially if the economic data and geopolitical climate become more positive.

Here's a look at the chart today:

There's a fair amount of economic news / data releases on the calendar this week with some of the highlights being the ADP private payroll report on Wednesday, the jobless claims on Thursday and the employment report on Friday - this is the biggie.  If Friday's report has a number over the expected 231K then we could see some sell-off in the bond market with rates moving higher.  Additionally, jobless claims numbers have been on the decline and some good numbers (for the economy, not rates) on Thursday could also provide impetus for a sell-off of the benchmark bond.

Rates are great and there is reason to float but I would only float in the very near term - I'm not a gambling man so I would most likely lock my loan (if I were in the process of doing one) before Thursday's jobless claims numbers and certainly before Friday's non-farm payroll report.  Please feel free to call me if I can help with anything mortgage related.  I'd also love to have you share your thoughts in the comments section.  Please like and subscribe as well.  Make it a great November.