No trending movement in the rate markets, just chop with the 10 yr and mortgages trading in a 10 basis point range for the past two weeks. Yesterday, one of the more volatile days in months, drove the 10 yr to 3.52% momentarily, then back to close at 3.41%, covering the entire trading range on the note in the last couple of weeks, mortgages also churning with no real changes.
At 8:00 this morning the 10 yr was unchanged, mortgages were +2/32 frm yesterday’s close. At 8:30 weekly jobless claims were expected to be up 5K to 550K, as reported claims declined 21K; continuing claims also dropped, from 6.26 mil last week to 6.138 mil. The reaction pushed the 10 down 4/32 and mortgages at 8:45 down 2/32. Stock indexes were flat prior to the claims data but increased 31 points on the DJIA. At 9:00 the DJIA futures was +10; 10 yr note +1/32 and mortgages +2/32. At 9:30 the DJIA opened +49, 10 yr +2/32 and mortgages +3/32.
August existing home sales at 10:00 were expected to be up 2.0%, they fell 2.7% to 5.10 mil units against 535K expected. Prices fell 12.1% annualized, inventory levels at a 8.5 month supply, the lowest level in 2 yrs. Government tax credits for first-time buyers and foreclosure-induced price declines are helping the housing market recover from the worst slump since the Great Depression. The equity markets went negative after being up 60 points on the DJIA earlier.
Yesterday’s action in the stock market, closing lower than the previous day after making a new multi-month high earlier in the day, may have a significant impact on the near term outlook in the equity markets. A new high, then closing lower than the previous day, is a technical key reversal. Whether it is meaningful depends on today’s trading, a lower close will add to the view stocks may finally be setting up for a major correction. Many times a key reversal pattern leads to a change in direction, but there has to be a lower close today to add conviction and confirm the reversal yesterday. Significant for the rate markets; to drive mortgage rates lower the bullish bias in equities has to be shaken.
Market Minute information for September 24, 2009 provided by:
Patsy Bailey
Mortgage Banker
Plaza Estate Mortgage
4801 Lang Ave NE Suite 100
Albuquerque, NM 87109
4001 Office Court Ste 603
Sante Fe, NM 87507
Cell: 505.715.3231
Office: 505.473.4045 ext.109
E-mail: patsybailey13@gmail.com
For more information on home financing, visit my Albuquerque Mortgage Page.
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