Treasuries and mortgages opened better this morning following the technical break of key resistance levels yesterday. At 9:00 this morning the 10 yr note +6/32 at 3.44% and mortgage prices up 4/32. Yesterday the stock indexes took a big hit supporting the bond and mortgage markets. At 9:00 this morning stock indexes were lower again. At 9:30 the DJIA opened +25, the 10 yr at 9:30 +6/32 3.44% and mortgage prices at 9:30 +4/32.
More evidence is accumulating that the economy isn’t what is thought to be—-on the road to recovery. While not falling as rapidly as earlier this year, job losses are continuing and with the exception of the two ISM reports (manufacturing and services—both still bearish) the various reports are not improving.
There is increasing talk of the need for another stimulus package and now we have this administration questioning its own policy initiatives. The present $787B stimulus package passed earlier this year has been an abject failure, wasted money that politicians used for pork and other non-job creation programs and most of the money yet employed.
This morning’s MBA’s purchase index increased 6.7% higher for the week. The refinance index also jumped, up 15.2%. Mortgage rates were little changed in the week, at a still favorable 5.34% for 30-year fixed mortgages. The previous week saw a huge declining in the rate of applications so we don’t hang much on this report, but any improvement is very welcome.
At 1:00 this afternoon Treasury will auction $19B of 10 yr notes, a true test of demand at the long end of the curve that will have an impact on mortgage prices and rates based on demand.
Not much data to think about this week but at 3:00 this afternoon May consumer credit will be released; expectations are for a decline of $7.5B after a big fall off of $15.5B in April.
Crude oil is leading the stock market lower along with renewed concerns over economic improvement. Crude ran up to $72.00 10 days ago, now at $62.00. Once again rapid swings in crude have brought out talk of trying to control speculators.
“Your Partner In Success!”
Tony Frerking
Sr. Mortgage Consultant
PMZ Home Loans
1600 N. Carpenter Rd. Ste. C
Modesto, CA 95351
Direct: (209) 404-2200
Fax: (888) 345-2768 **NEW**
