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Fed Offers No QE3 and Stocks Tumble - 02/29/12 02:58 PM
As in other markets, stock traders reacted poorly to Ben Bernanke's unwillingness to suggest another round of quantatative easing in order to further assist our stodgy economy.  Historicallly quantatative easing has lead to significant gains in stocks markets here as the process causes the dollar to lose ground against foreign currency.  This makes our products more affordable overseas and improves our trade balance.  As a result, the Dow fell off its lofty perch above 13,000 and closed down 53 points.
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February 29th Mortgage Market Wrap-up - 02/29/12 02:53 PM
Mortgage backed securities (MBS) closed down 19 basis points today at 103.38 having fallen through the 25 day moving average and then down to test support at the 50 day moving average prior to closing 24 basis points above it.  The big reason for today's selloff was Fed Chairman Ben Bernanke's testimony before Congress.  He talked about a slight tick inflation based on energy costs and a slowly improving economy.  What he did not talk about was the possibility of QE3, additional purchasing of government securities.  That omission roiled markets.
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Stocks Inch Ahead Slowly - 02/28/12 03:16 PM
After posting a four year high yesterday, all eyes were watching to see if the S&P 500 could advance once again today.  The S&P 500 is an unmanaged group of stocks which are thought to best represent our economy.  Stock futures which began the day higher moved closer to neutral as poor readings on Durable Goods Sales and house prices disapointed.  In order to move forward, companies have to purchase items which will last more that three years.  The S&P closed up 4  as the rose by 23 points.
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February 28th Mortgage Market Wrap-up 2 - 02/28/12 03:10 PM
Mortgage backed securities (MBS) closed up 3 basis points today at 103.56 having once again remained above the strong double support offered by the 25 and 50 day moving averages and inched ever so slightly upward toward the record territory of receent weeks.  Today's Japanese candle if the ominous Gravestone Doji which normally portends a reversal from a positive trend.  World events could well prove out that direction if the Euro benefits from tomorrow currency traders.  The 15 year was at 3.125% today.
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Stocks Stumble on IMF News - 02/27/12 03:23 PM
When the IMF made its decsion over the weekend not to provide any more capital to the European Central Bank to help them with their debt restructuring, it probably was not well received in Germany.  The Germans may now be forced to have a little quantatative easing of their own in order to have sufficient capital to help theiir less fortunate siblings shape up after the wayward paths they have travelled in recent months.  Stock opened lower on the news, rallied in the middle of the day and closed near flat.
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February 27th Mortgage Market Wrap-up 2 - 02/27/12 03:01 PM
Mortgage backed securities (MBS) closed up 12 basis points today at 103.53 having remained above double support offered by the 25 and 50 day moving averages.  The record high closings of recent weeks lie close above and definitely within striking distance.  The International Monetary Fund told the European Community today that they would not provide additional funds the European Bank to help clean up the debt crisis there.  The 30 year fixed conforming loan was available at 3.875% today for qualified buyers.
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Oil Costs Growing out of Proportion - 02/24/12 03:15 PM
Similar to bonds, stocks closed the week nearly unchanged today as trading volume was unusally light.  I don't remember the President's Day holiday ever having had such long coattails when it comes to impacting volume.  The big news for the week is the ever rising cost of crude oil.  The speculation over limiting exports of Iranian oil are having a completely unrealistic effect on traders here and  abroad.  The price per gallon of fuel here is climbing by the minute.  This is the last this our economy needs right now.  We need to trade our natural gas for the rest of … (0 comments)

February 24th Mortgage Market Wrap-up 2 - 02/24/12 03:06 PM
Mortgage backed securities (MBS) closed flat today at 103.41 having fallen just slightly below resistance offered by the 25 day moving average and remained just above support at the 50 day moving average.  All in all MBS bonds have made back 60% of the losses incurred in the previous week.  With the Greek drama out of the way for the moment, traders have been able to focus on some positive Treasury auctions.  Bonds have fared well despite some mounting inflationary pressure.  The 30 year fixed closed the week at 3.875%.
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Stocks Advance As Oil Prices Gush - 02/23/12 03:21 PM
Today was one of those rare days I sometimes speak about during which stocks and bonds both go in the same direction.  As bonds moved forward modestly on news of a solid Treasury auction, stock traders revelled with another low number of initial unemployment claims and an improvement in the four week moving average.  The Dow had a decent day closing up 46 points.  Tomorrow Consumer Sentiment and New Home Sales data will be released.  Somewhat troublesome, however, was crude oil trading at 108. in an overreaction to Iran's threat. 
Amount of U.S. oil consumption that comes from the Middle East: … (0 comments)

February 23rd Mortgage Market Wrap-up 2 - 02/23/12 03:11 PM
Mortgage backed securities (MBS) closed up 10 basis points today at 103.44 having successfully passed upward through resistance offered by the 25 day moving average.  If bonds can sustain themselves above this new level of support, they can once again attain the rarified space approaching the record levels of recent weeks.  The Euro improved again vs. the dollar allowing bond traders to turn bullish once again.  Bolstered by a sold auction of 7 year Treasuries, they pushed the 30 year fixed back to the 3.875% range.
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Stocks Sputter as Bonds Rally - 02/22/12 01:19 PM
Stocks began the day with slight losses as Dell projected lower earnings than expected and news from Europe showed lackluster economic activity.  Existing home sales rose but traders were still taking profits and consolidating posiitions after the recent run up to the 13,000 level.  With fixed income products like Treasuries and MNS bonds back on track, it will be interesting to see if stocks can continue their advance.  Some speculators are calling for the Dow to hit 14,500 by year end.  That would be nice but we will have to see.
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February 22nd MOrtgage Market Wrap-up 2 - 02/22/12 01:11 PM
Mortgage backed securities (MBS) closed up 41 basis points today at 103.38 having bounced upward from support at the 50 day moving average prior to closing at the high of the day just one basis point below resistance at the 25 day moving average.  After what appeared to be a trend change, MBS bonds rebounded nicely today as a fairly strong Treasury auction buoyed traders spirits.  Money flowed from stocks into bonds.  The closing at the high of the day bodes well for bonds in coming days.
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Greeks Solvent for Now - 02/21/12 02:52 PM
The Greek deal for the $130 billion Euro bailout is finally in place to avoid an unsightly default in March.  Questions linger, however, as to what will happen when the next deadline occurs.  With all the belt tightening measures including reducing services and the minimum wage structure, the Greek economy has little chance of growing.  The Dow Jones was in rally mode this morning and climbed all the way up to the 13,000 level before cooler heads prevailed.  The Dow closed up 15 points.
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February 21st Mortgage Market Wrap-up 2 - 02/21/12 02:32 PM
Mortgage backed securities (MBS) closed down 28 basis points today have fallen all the way down to the 50 day moving average prior to closing just 1 basis point above it.  The 50 day moving average has been a strong level of support.  It has remained a trusty saftey net since October.  It will be interesting to see if MBS bonds can stop their slide at this level.  Bonds have fallen through both the 25 day moving average and the rising trend line.  Those are two negative indicators.  A fall through the 50 day would signal higher interest rates ahead.
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Good Economic News Pushes Stocks Higher - 02/16/12 06:37 PM
Another tease from Greece today indicating that a Greek debt deal might actually be reached, helped push stocks higher today.  Housing starts were higher than expected last month and initial jobless claims were at a low not seen since 2008 coming in at 348,000.  This improved the moving average and gave traders something to smile about.  The Philly Fed Manfactuing Index, an indicator of future production, came in higher than expectred as well.  by the close of the session the Dow was up 123 points.
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February 16th Mortgage Market Wrap-up 2 - 02/16/12 06:30 PM
Mortgage backed securities (MBS) closed down 34 basis points today at 103.41 having fallen right down to the support offered by the 25 day moving average and close there.  Bevies of good economic news came over the internet today causing dollars to flow from bonds back into equity markets.  The worst news for bond traders was the fact that the Producer Price Index, a measure of inflation, was up.4% which was double what investors expected.  Interest rates started to climb away from 3.75% as banks repriced during the day.
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February 14th Mortgage Market Wrap-up 2 - 02/14/12 06:16 PM
Happy Valentines Day to all you rainers out there.  Here is wishing you a pleasant journey with all the passions you afford yourself.  Mortgage backed seccurities (MBS) closed up 28 basis points today at 103.75 having taken another step upward toward the recent highs of all time.  Despite the high prices for MBS bonds, banks are becoming more and more reluctant to let interest rates drop any lower.  Retail sales were lower and many Euro countries received rating downgrades.  This provided enough bad news to keep bond traders happy.
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Greeks Take Action At Last - 02/13/12 06:09 PM
The Greek congress passed legislation containing some stringent belt tightening rules which should help with the rampant spending.  Unfortunately the Greek people themselves are sick of the stagnant economy and cannot envision even tighter spending which will cause them to deal with reduced benefits and services.  Although these measures will not fix the problem entirely, at least the agonizing uncertainty of recent weeks has past.  Stock traders cheered the vote and the Dow closed up 72 points.
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February 13th Mortgage Market Wrap-up - 02/13/12 06:03 PM
Mortgage backed securities (MBS) closed up 6 basis points today at 103.47 having remained above support offered by the 25 day moving average and remained within shooting  distance of the all time highs.  With some minor progress in the Greek debt crisis, albeit now frought with North Africa like violence, the "safe haven" trade cooled off somewhat today.  We will be watching the Euro carfully over the coming days as it is near an important support level.  Any further fall could cause U.S. bonds to prosper once again.
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The Big Mac Reigns - 02/08/12 06:23 PM
With no economic reports coming out today and bond traders cringing about the Treasury auction of $24 billion of 10 year notes after yesterday's 3 year auction garnered only a C+, stock futures were on the the rise this morning.  It seems Big Macs and Mc just about anything elses are still popular here and around the world as they showed strong earnings today.  The world's largest money manager, Blackrock, is bullish on stocks.  A fed spokesman said that home values have stopped sliding and with all that the Dow managed to gain just 5 points today
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February 8th Mortgage Market Wrap-up 2 - 02/08/12 06:15 PM
Mortgage backed securities (MBS) closed up 16 basis points today at 103.88 having been able to remain just below resistance formed by the highest levels of all time.  Interest rates are at a level which is encouraging yet another round of refinancing.  We have a 5/1 ARM availabe at 2.625% for loans up to $1,500,000. with no addons to pricing.  It is no wonder the rich get richer having to pay such low interest rates.  Combine that with capital gains on their investments being taxed at 15% and life is beautiful.  Conforming rates are great as well.
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Equity Markets Slug Ahead - 02/07/12 06:28 PM
Stock futures pointed wisely to a poor opening in equity markets today.  A continued lack of solutions in the Euro sphere caused uncertainty to prevail over any particular direction.  The velocity of money indicator continued at a slow pace, preventing any appreciable increase in economic activity or inflation.  The Fed's infusion of cash into Treasuries and MBS bonds has done little to spur investment in production or small business.  Confidence is required to encourage business owners to invest in new employees.  The country needs a giant dollup of enthusiasm.  The Dow rose 32 points on the day.  Snooze on!
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February 7th Mortgage Market Wrap-up 2 - 02/07/12 06:18 PM
Mortgage backed securities (MBS) closed down 9 basis points today at 103.72 having remained near the historic highs of recent days.  There was very little economic  news to cause MBS bonds to move.  On the geopolical front, news from Greece was as typically vague as that to which we have become accustomed.  They just cannot or will not finalize the agreement on the investor haircut.  My frustration is building.  A C+ on today's Treasury auction was perfect indicator of at truly humdrum day in the market.  Rates remained predictably unchanged.
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Greek Malaise Limps On - 02/06/12 06:28 PM
Stock futures opened lower this morning as they once again felt tremors from the perpetually unresolved status of the Greek bonds and the investors haircut debacle.  Why can't they settle this issue once and for all?  There were no economic reports due out today so it seemed that this Ouzo induced stupor would permeate trading for the entire day.  On what turned out be the lightest trading day of the year, each of the three major exchanges closed down minimally with he Dow down 17 points.
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Febraury 6th Mortage Market Wrap-up 2 - 02/06/12 06:21 PM
Mortgage backed securities (MBS) closed up 9 basis points today at 103.81 having recovered from Friday's sell off and gained back a little ground.  The long term trend for MBS bonds has been positive for quite some time with a short term bias for locking in order to take advantage of this incredible low rate environment.  Clients seem to be less concerned with jockeying for a .125% rate reduction when they know rates are at their all time lows.  The 30 year fixed was available at 3.75% once again today.
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Traders Lay Low Awaiting Jobs Report - 02/02/12 07:05 PM
Stock futures opened flat this morning as there had been little activity in Europe and traders were holding their positions close to the vest in advance of tomorrow's jobs report.  Initial jobless claims remained low at 367,000 below expectations of 375,000 and improved the moving average.  A report on retail sales showed that as many outfits showed gains as losses and that was kind of the way it went in stocks today.  The NASDAQ and S&P showed moderate gains while the Dow closed down a slight 11 points.
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Febraury 2nd Mortgage Market Wrap-up 2 - 02/02/12 06:58 PM
Mortgage backed securities (MBS) closed up 9 basis points today at 104.03 (yes over 104.) having passed the all time high level and gone where no MBS bond had gone before.  I know I have been telling you for years that every 50 basis point movement in the underlying MBS bond equates to a .125% change in the interest rate.  In this case, however, rates are already so low that banks may be reluctant to publish rates any lower that they are now.  The 30 year fixed loan remained at 3.75% today.
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Global Economic Progress and "Golden Cross" Portend Well for Stocks - 02/01/12 05:54 PM
Stocks took a powerful step this morning on news from China and Germanyy that economic and production levels were up.  The Italian 10 year notes were yielding less that six percent today down from their highs over seven.  This good news served to unfold much of the "safe haven" trading that has been helping Treasuries and MBS bonds remain at high levels.  Also good news on jobs encouraged stock traders.  The S & P 500 charting exhibited a "golden cross" which occurs when the 50 day moving average passes the 200 day moving average.  In past this pattern has meant large gains … (1 comments)

February 1st Mortgage Market Wrap-up 2 - 02/01/12 05:45 PM
Mortgage backed securities (MBS) closed up 3 basis points today 103.91 having remained near all time high pricing despite a surging stock market.  MBS bonds which were down early in the day proved resilient today despite yesterday's closing candlestick and its negative demeanor.  Many times in the past when bonds have reached such incredibly lofty levels a swfit correction has occurred.  We will watch carefully to see how things play out this time.  The 30 year fixed was available at 3.75% today.
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