[where: 87109]

Treasuries and mortgages opened weaker early this morning on better trading in the stock index futures. At 8:30 Feb retail sales were much better than expected adding more to the stock indexes and pressing rate markets a little more. Retail were expected to be up 0.2% overall and ex autos unchanged; sales increased 0.3% and when auto sales are stripped out sales were up a solid 0.8%; when auto and gas sales are removed, up 0.9%. Sales were markedly stronger, particularly with the number of major snow storms in Feb that hit much of the East and Mid-West. At 9:00 the 10 yr note -7/32 at 3.76% +3 BP, mortgage prices -5/32 (.15 bp) and the DJIA index +39. At 9:30 the DJIA opened +20, 10 yr note -4/32 and mortgage prices off 4/32 (.12 bp).

Better retail sales this morning linked with last week’s better than expected employment report are suggesting consumers are starting to spend and job losses may have finally ended. That said, there is still a cadre of non-believers or at least still not convinced the economic recovery will continue. As each better than expected economic reading hits, it is increasingly difficult to question the recovery. While job losses may have essentially ended, new hirings will be very slow to rebound. Q4 productivity and unit labor costs strongly imply employers will continue to get more from workers and drag feet on new hirings. It really looks like the worst of the recession is behind us. Still bothersome is that there isn’t much recovery in the housing sector, the loss of wealth, slow increase in employment, a new consumer realization that excessive spending is bad and savings is good, and the possibility of a double dip if employment remains weak.

The U. of Michigan consumer sentiment index, expected to increase slightly to 73.8 frm 73.6 at the end of Feb. The index declined to 72.5 putting a little support in the bond market and taking away some of the strength in equities. Finally today, at 10:00 Jan business inventories, expected up 0.2%, were unchanged.

Market Minute information for March 12, 2010 provided by:

Patsy Bailey Mortgage Banker

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

  Equal Housing Opportunity

For more information on home financing, visit my Albuquerque Mortgage Page.

I had an interesting conversation the other day on Twitter. Dominic Pruitt mentioned that when he was moving to Albuquerque from Tucson, he wanted a REALTOR® who uses Docusign. In his Google search for “Albuquerque realtor docusign,” he was unable to find anyone using it. Fortunately, there are several brokers in Albuquerque who do use docusign, including myself.

What is docusign?

It’s an electronic signature document delivery service. Your broker simply emails you the documents, and you sign electronically. No need to print or fax. Many times, my buyers or sellers have been traveling and unable to access a fax machine quickly. This is a convenient, time-saving solution.

 
Mortgage Rates for March 10, 2010 provided by:

Patsy Bailey Mortgage Banker

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

  Equal Housing Opportunity

For more information on home financing, visit my Albuquerque Mortgage Page.

[where: 87111]

The interest markets were still holding firm until Friday, hitting up against strong technical resistance on the bellwether 10 yr note at 3.60%/3.58%. Its been a solid resistance level since mid-January; the 10 yr note closed at 3.68% last Friday after declining to a 3.59% close the previous Friday (2/26); last week the 10 yr tested the resistance level everyday, until Friday. The 10 yr note rate at Friday’s close is the highest since 2/23.

A weaker start in the rate markets this morning with the stock indexes unchanged at 9:00 this morning. In Asia stocks rallied on better employment reports, in Europe retail sales were better than expected. The decline in US jobs was less than expected and the unemployment rate held unchanged at 9.7%; Asia is getting a boost this morning on the increased view that US job markets have likely bottomed. At 9:00 the 10 yr note -10/32 3.71% +3 BP, mortgage prices -7/32 (.22 bp). At 9:30 the DJIA opened +5, 10 yr note -9/32 and mortgage prices -4/32 (.12 bp) frm Friday’s close.

Mortgages have held strong against treasuries recently, ignoring the choppy and generally non-treasuries. Although the mortgage markets are presently holding well, if treasury rates break out to an up-trending move (3.75% on the 10 yr) at 9:13 today at 3.73%, mortgage rates will follow quickly. Unless there is a major shift in sentiment about the strength of the economic rebound interest rates won’t likely decline much more. The overall view is for increasing rates this year; estimates from 4.15% on the 10 yr note to as high as 5.00%; we don’t see 5.00%, more likely 4.25%. That would mean 30 yr mortgage rates at 5.50% to 5.60%.

By 10:00 the stock market indexes were struggling to hold slight gains. The rate markets, with auctions ahead, won’t have rally power unless there is a sizeable decline in the equity markets. Technically, the 10 yr still is managing to hold around 3.70% but the outlook is questionable; the note cannot break 3.60%/3.58% resistance. As long as the 10 yr holds below 3.75% on a closing basis the tight range will be intact. A break above 3.80% will send the note to 4.00% and drive mortgage rates higher with it. Depends on what stock indexes do in the next few weeks; there are still many looking for a double dip for the economy.

There are only a few data points that will garner attention this week; they do not appear until Thursday and Friday when retail sales, weekly jobless claims and the U. of Michigan consumer sentiment index hit. The key this week is Treasury auctions; a total of $74B in 3 yr and 10 yr notes and a 30 yr bond on Tuesday, Wednesday, and Thursday. While the rate markets don’t pay direct attention to them; Treasury also will sell an additional $136B in Treasury bills (obligations with one year or less in duration). Each month Treasury sells $192B in notes and bonds (2 yr through 30 terms), so far the demand for the debt has been very good, foreign investors and direct bidders (anonymous) are stepping up to the table of deficits to fund it. This week’s auctions are expected to see equally strong demand.

Market Minute information for March 8, 2010 provided by:

Patsy Bailey Mortgage Banker

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

  Equal Housing Opportunity

For more information on home financing, visit my Albuquerque Mortgage Page.

[where: 87109] [where: 87111] [where: 87112]

[where: 87122] [where: 87113]

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Treasuries opened unchanged this morning but mortgages started better in early trade. At 8:30 weekly jobless claims were down 29K to 469K, markets were expecting a decline of 20K. Last week’s initial claims were originally reported +22K at 495K; today last week was revised from +22K to +19K. Continuing claims fell to 4.5 mil frm 4.634 mil last week. The take away, the unemployment situation is slightly better; however, as will be the case tomorrow with the Feb employment report, the claims data is questionable due to the weather conditions that closed down the East twice in Feb. The number of people receiving unemployment insurance decreased to the lowest level in a year, while those receiving extended benefits climbed. Today’s report showed the number of people who’ve used up their traditional benefits and are now collecting extended payments increased by about 198,000 to 5.87 million in the week ended Feb. 13.

Also at 8:30 revision of Q4 productivity was expected unchanged at +6.2%, was revised higher to +6.9%, Q4 unit labor costs were also revised from -4.4% to -5.9%. Higher productivity leads to lower labor costs, getting more out of workers. Productivity and unit labor costs were the key drivers for the Q4 GDP jump to +5.9%.

Not much reaction to the 8:30 data in the bond and mortgage markets; the stock indexes did move up slightly but not much; the 10 yr +1/32, mortgage prices +3/32 (.09 bp). Claims are questionable and the other releases are history and carry little weight looking forward. At 9:00 markets were beginning to move; the DJIA +28 points, the 10 yr note -6/32 to 3.65% +2 BP and mortgage prices -3/32 (.09 bp). At 9:30 the DJIA opened +20, the 10 yr note -3/32 at 3.64% +1 BP and mortgage prices +1/32 (.03 bp).

Two more data points at 10:00; Jan factory orders were expected to be up 1.8%, orders were up 1.7%, ex transportation orders up 0.1%; Dec orders were revised from +1.0% to +1.5%. Jan pending home sales were thought to be up 1.7%, pending sales fell 7.6% in the month. On a yr/yr basis pending sales were up 12.3% frm Jan 2009. As with tomorrow’s employment report and today’s weekly jobless claims, the NAR is blaming the Jan decline on the weather. Initial reactions improved the 10 yr price and mortgages a little and dropped the stock indexes somewhat.

The 10 yr note continues to be forced back every time it moves to 3.60% area but it also continues to trade below its 20 and 40 day moving averages.The momentum oscillators are at neutral levels, not bullish or bearish. The FNMA Mar coupon is also a mixed technical picture, trading above its key 20 and 40 day averages on the price chart but the relative strength index is at very overbought levels. Mortgage prices cannot continue to increase without some pullback; every time the RSI index is at this high level the next move is a decline in prices. Not to suggest that this is the end of the rally in mortgages, but a correction is not far off.

Tomorrow’s Feb employment data will be clouded by the Feb weather; regardless of how it comes out markets will put an asterisk on it due to the severe winter weather over most of the country in Feb. Current forecasts call for a decline of 75K jobs, the estimates have been notching lower through the week as weather factors have been dragging the forecasts lower. The unemployment rate is expected to increase to 9.8% frm 9.7% in Jan, the unemployment rate may well increase to 10.0%. As the economy recovers more people will be back looking for work,that will have the affect of increasing the unemployment percentage. The BLS uses a phone survey to establish the unemployment rate, if a person says he or she has not been looking for a job, that individual is not counted as unemployed. Once people go back to looking and not finding a job, the unemployment rate will edge up.

Market Minute information for March 4, 2010 provided by:

Patsy Bailey Mortgage Banker

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

  Equal Housing Opportunity

For more information on home financing, visit my Albuquerque Mortgage Page.