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.

Ashley Drake Gephart Director of Social Media, Associate Broker, REALTOR® Prudential Sandia Real Estate Best: 505.261.0389 Office: 505.271.5800 Email Ashley Albuquerque Real Estate Albuquerque Home Value - Complimentary CMA

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Mortgage Rates for March 3, 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.

Ashley Drake Gephart Director of Social Media, Associate Broker, REALTOR® Prudential Sandia Real Estate Best: 505.261.0389 Office: 505.271.5800 Email Ashley Albuquerque Real Estate Albuquerque Home Value - Complimentary CMA

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Last week interest rates declined in a big move; the 10 yr note declined 16 basis points while mortgage rates for 30s fell 10 basis points. Weak economic data and the continued concern over possible debt defaults from Greece and Portugal have supported the bond markets. Technically, the 10 yr note is trading at its longer term resistance level between 3.58% and 3.60%; Friday’s low yield hit 3.59% before increasing to close at 3.62%. In just six sessions the 10 yr fell 20 basis points, mortgage rates down 11 basis points; likely the decline will pause here. The bias remains bullish but at the resistance level interest rate declines may stall out. As long as the economic outlook remains positive, lower rates may be difficult to achieve.

Treasuries and mortgages started unchanged early this morning. At 8:30 Jan personal income and spending; income was expected to be up 0.4% but hit at 0.1%; spending expected up 0.4%, it was up 0.5%. There was no market reaction to the data in either equity markets or the bond market. The DJIA at 8:40 +30, 10 yr note unchanged and mortgage prices -1/32. At 9:00 the DJIA +36, 10 yr note +2/32 and mortgage prices +1/32 (.03 bp). At 9:30 the DJIA opened +46, the 10 yr at 9:30 unchanged and mortgage prices -2/32 (.06 bp).

The gorilla in the room this morning; the Feb ISM manufacturing data; the overall index was thought to be 58.0 frm 58.4 in Jan, it hit at a weaker 56.5. New orders component at 59.5 frm 65.9, employment at 56.1 from 53.3 and prices pd at 67.0 from 70.0 in Jan. The overall index slightly weaker but the components were generally better on employment. There was absolutely no reaction to either 10:00 reports in the bond or stock markets.

This is employment week, always a big week for markets; this time around is even more critical if that is possible. Last week we saw Jan consumer confidence plummet to a new low, declining 10 points (20%) frm Dec. Last week Jan existing and new home sales took big hits; new home sales down 11.2% and existing home sales -7.7%, both were widely expected to show slight gains. The surprising decline in confidence possibly implies job losses may be higher than the consensus (-20K jobs in Feb is the current estimate). Consumer confidence and still soft housing markets continue to drag on the recovery, but still investors are by and large optimistic about the outlook. The Feb employment data, if it reveals more job losses than economists’ forecasts, may shake that bullish outlook, so far however most of the softer data has been ignored based on the level the key stock indexes are trading. In Jan non-farm jobs were expected to be up 13K but fell 20K and Dec job losses were revised from -85K to -150K; on the annual revision frm March 2008 to April 2009 the number of jobs lost jumped frm -7.2 mil to -8.4 mil.

The Fed’s vice chair Donald Kohn has announced his resignation this morning; no market reaction to it. Pres Obama will have to appoint another vice chair. He was on the Board since 2002 and the vice chair since 2006.

Market Minute information for March 1, 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.

Ashley Drake Gephart Director of Social Media, Associate Broker, REALTOR® Prudential Sandia Real Estate Best: 505.261.0389 Office: 505.271.5800 Email Ashley Albuquerque Real Estate Albuquerque Home Value - Complimentary CMA

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