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Market Update 1-28-11

Mortgage and Lending with Wisconsin Bank & Trust

GDP, our country's gross domestic product, grew 3.2% in the 4th quarter 2010, a touch below expectations of 3.6%.  Consumer spending gave the number its biggest kick, up 3.0%.  That component had the biggest gain in more than four years.  The Employment Cost Index, another component of GDP, rose .4% which was the second smallest gain on record.  Traders follow that number closely as it has a direct correlation to wage inflation.  The University of Michigan Sentiment Survey was also released, dipping .3 to 74.2.  The current conditions index did the trick, falling nearly 4 points as American's question the need to purchase big ticket items.  Market reaction to all of the above was not good for bonds or stocks in the early going.  Since the open, bonds, notes, and mortgage backs have made a comeback with the 10 year note currently up 9/32's (yield 3.35%) and mortgage backs unchanged (they were off 3 to 4/32's in the early trade).  We priced down 2/32's so you will need a little more juice on MBS trading to get a price improvement.  Stocks are helping our cause, now off over 70 points on the big board.  We like the market today and Monday, based on the add needs in duration for fixed income portfolio's.  After that, all bets are off since the market will be driven by a new month and data ranging from Construction Spending to Big Daddy, the Employment Report for January.  Have a great weekend.
Scott S. Eggen
Senior Vice President - Capital Markets
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252


© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking- lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.