Happy Sunny Friday! Below are some various commentaries on the rate environment - great time for rates but keep in mind the market is volatile and who knows from day to day what the markets will be doing - in the meantime it's a great time to buy for sure! And even refinance if this has not done as of yet; if you know anyone that needs a "Mortgage Fitness Checkup" please let me know and I'll be happy to do a no obligation review.
Be sure to get outside this weekend and get some good ole Vitamin D!
Hugs.
From Think Big, Work Small
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Treasuries and mortgages started better this morning on the back of weaker trading in the stock indexes. Yesterday afternoon in the final 90 minutes of the stock market trading the indexes all came under pressure and there is early follow-through this morning. After seemingly ignoring the reality that the European bailout would push Europe's economic growth lower, the markets are getting it, that the issues facing Europe are severe enough to slow whatever growth it had. Austerity and spending cuts, wages being cut, the euro continuing to decline has at least for the moment gotten the attention of investors.
At 8:30 April retail sales were a little better than expected for the overall; up 0.4% against +0.2% estimate. When auto sales are extracted sales were up 0.4% also and that was in line with forecasts; March sales were revised higher, to +2.1% frm +1.9%, ex autos to +1.2% frm +0.9% originally reported. No positive reaction to the better sales in stock trading.
At 9:15 April industrial production, expected +0.6%, was up 0.8%. April factory usage expected at 73.8% was 73.7% frm 73.1% in March; it is the highest usage since Nov 2008 when it hit 74.4%. There was no positive reaction to the two reports in stock index futures trading.
At 9:30 the DJIA opened -61, the 10 yr note at 3.48% -5 BP and mortgages at 9:30 +7/32 (.22 bp). By 10:00 mortgage prices were up 12/32 (.37 bp) and the stock market off 162.
At 9:55 the U. of Michigan mid-month consumer sentiment index; estimates were for an increase in the sentiment to 73.8 frm 72.2. The sentiment index hit at 73.3; the expectations component was better at 68.3 frm 66.5 at the end of April; the 12 month outlook index also increased to 84 from 80. No positive response to the data; the sentiment data more reflects the movement in the equity markets as consumers base their outlook on what markets believe at the moment.
At 10:00, the last of the data today, March business inventories. Estimates were for inventories to have increased 0.4%, they were right on estimates. Sales were up 2.3% with a 1.24 months of inventories versus sales.
The euro currency is continuing to decline, evidence that the problems in Europe's debt issues will likely contract the economic improvement that was a little soft anyway. The euro fell below $1.24 early (another new low) but rebounded some before making another new low at 10:00. Reports from Europe this morning that France is threatening to pull out of the EU; denied vehemently by officials in Germany, nevertheless comments like that clearly suggest increasing unrest in that region. Gold, the new safe haven currency, is higher again this morning; additional evidence that global debt problems may slow growth in Europe and the US and could lead to sovereign debt defaults. China is deliberately slowing its growth to head off inflation.
Nothing left on the calendar through the rest of the day; one Fed speaker this afternoon but nothing of concern. Being Friday and with the weekend ahead traders will think about what could come from Europe as we had last weekend. |
From Freddie Mac: Mortgage Rates at Lowest Level of the Year May 13, 2010 Short-Term Rates Fall As Well
McLean, VA - Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.93 percent for the week ending May 13, 2010, down from last week when it averaged 5.00 percent. Last year at this time, the 30-year FRM averaged 4.86 percent. The 30-year FRM has not been lower since the week ending December 10, 2009, when it averaged 4.81 percent.
The 15-year FRM this week averaged 4.30 percent, down from last week when it averaged 4.36 percent. A year ago at this time, the 15-year FRM averaged 4.52 percent. The 15-year FRM has not been lower since the week ending December 3, 2009 when it averaged 4.27 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.95 percent this week, , down from last week when it averaged 3.97 percent. A year ago, the 5-year ARM averaged 4.82 percent. The 5-year ARM has not been lower since Freddie Mac started tracking the 5-year ARM in January of 2005.
The 1-year Treasury-indexed ARM averaged 4.02 percent this week, down from last week when it averaged 4.07 percent. At this time last year, the 1-year ARM averaged 4.71 percent. The 1-year ARM has not been lower since the week ending November 4, 2004, when it averaged 4.00 percent.
"Interest rates on fixed-rate mortgage declined for the 5th straight week," said Frank Nothaft, Freddie Mac vice president and chief economist. "The National Association of Realtors® reported that median house prices are recovering in more local areas in the latest quarter. On a year-over-year basis for the 152 areas the association reports on, 91 metropolitan areas had positive growth in the first quarter of this year. This compares to 67 areas showing positive annual growth in the fourth quarter of 2009 and only 30 cities in the third quarter of last year."
From Dick Lepre, San Francisco
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Here are some silly tax trivia from my friend at Tax Mama.com - can you believe some of these crazy deductions?!
Speaking of not giving up, people will try anything for a good tax deduction. This year, Intuit www.intuit.com heard from some of its accountant customers about the strangest deductions clients requested in TY09, which include trying to write off an Armani suit and a hired psychic. Here are some of the most common "strange" deductions that were requested.
- Pets - to be written off as pest control or security small business
- Beauty/Cosmetics - including, fake eyelashes, haircuts, spa treatments and a purchased blow dryer to prepare for a meeting
- Recreation Activities - fishing gear, golfing expenses and horses
Even more bizarre things are happening in the world of Homebuyers Credits. I am waiting to get some answers from IRS about the goings on. The May TaxWatch column will be covering some interesting revelations about the Homebuyers Credit that I'll bet you didn't know. Stay tuned for the third week of May!
http://www.marketwatch.com/Journalists/Eva_Rosenberg
And please, TO SUBSCRIBE .http://www.taxmama.com
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