US Stocks are down slightly to begin the day, which may have more to do with a lingering "hangover" from Friday's losses than anything else. Mortgage Bonds are trading at basically unchanged levels from last week's closing numbers.
There is a saying that "lousy Friday's are often followed by rotten Monday's", and with an absence of economic reports to alter direction, this seems to be the case. Financials continue to be a concern as rumors regarding a 10% cut in investment banking divisions by both Citigroup, and Goldman Sachs have hit the Street. Piling on to this negative trend, Oil prices continue to rise, despite a pledge by the Saudi's to raise production.
Mortgage Bonds rallied last week, but were turned back by the same technical pricing resistance point for three days in a row. This limited improvement for home loan rates to only .125% better, after rising by .500% the week prior. As a result, the current weekly national average for a 30 year fixed rate mortgage now stands at its highest point of the year, between 6.75% and 6.875%.
With literally no economic reports out today, the FOMC meeting tomorrow, and releasing their decision on interest rate change Wednesday, there is little reason for any significant market movement. I am recommending to float cautiously, and expect Bond pricing to continue trading between the 10 day average, and the overhead pricing resistance established last week.
Make it a great day!
Ron Brown
615 E Pioneer Ave.
Puyallup, WA 98372
(253) 520-0000
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