Posts Tagged ‘buy a home’
Market Update 8-18
MORTGAGE MARKET UPDATE
The US stock market is being hit hard this morning on continued weakness in Europe’s bank stocks that are seeing heavy selling.This morning the bond and mortgage markets opened strong, the 10 yr note at 2.10% at 8:30, mortgage prices +8/32 (.25 bp), the DJIA futures index -231. The situation in Europe over sovereign debt problems in five of its EU countries isn’t getting any closer to a resolution. Tuesday France and German leaders met, it was in market terms a non-event; neither country is willing to do much more to come up with a workable plan, assuming of course there is a chance. Investors are increasingly more concerned the banks in Europe are unprepared for the possibility that there could be actual defaults. The infection in Europe is quickly moving to the US and the economic outlook. Banks in Europe are being hit hard today, down about 8.0% on many bank stocks, even with short selling bans in place in many countries; US and Asian banks are increasingly unwilling to lend the Europe’s banks.
The WSJ reported that U.S. regulators are stepping up scrutiny of local operations for Europe’s largest banks on concern that the sovereign debt crisis may lead to funding problems.The Federal Reserve Bank of New York has been holding talks with the lenders and sought information about their access to funds to maintain operations in the U.S., the newspaper said, citing people it didn’t identify. Europe and its regulators, the IMF and the ECB have made little or no progress toward a plan to avoid defaults; the result is dragging US stocks lower this morning and increasing the idea the US economy will decline further.
Two data points at 8:30; weekly jobless claimsincreased 9K to back above 400K to 408K, its been 16 weeks with clams at or above 400K (last week’s claims revised to 399K frm 395K). Continuing claims increased 7K to 3.702 mil. July consumer price index jumped 0.5%, over twice the expected increase (0.2%); the core rate however was up 0.2% as expected. Yr/yr overall CPI +3.6%, yr/yr on the core rate +1.8%. CPI more tame than producer prices, but may see increase next month if producers have to push through their increasing costs. There was no reaction in markets over the 8:30 data.
At 9:30 the DJIA opened down 230 points, the 10 yr note +30/32 at 2.06% -11 bp and mortgages +17/32 (.53 bp). Gold jumping over $1800.00 to $1821.00. Not a pretty picture to start the day.
Three key economic releases at 10:00.August Philadelphia Fed business index, expected at 4.0 from 3.2 in July, shocked, down to -30.7, new orders index -26.8, employment component -5.2 from +8.9 in July. The report is rocking markets even more than prior to the data; any index read under zero is considered contraction, this was a huge hit. More bad news; July existing home sales were expected to be up 3.0%, sales as reported declined 3.5% to 4.67 mil against forecasts of 4.92 mil. The only bright point today, July leading economic indicators were up 0.5%, a little higher but always overlooked by traders. The 10:00 data pushed the 10 yr note yield to 1.97% on the knee jerk reaction.
Interest rates crumbling this morning as the stock market is being hit hard. Mortgage rates and prices improving but will likely drag treasuries with lenders still facing huge problems with re-financing locks that for the most part are falling through the cracks; one lender pointing out the pull-through rate is a low as 20%. That seems extremely low, but it indicates that many of the re-finance applications will not make it to closing, either because of appraisals, credit scores, lack of equity or just backing off as rates decline.
The Troll
Grand Opening Wrap Up
Well, even though Mother Nature tried her best to rain on our parade, the brave band of trolls who took to our parking lot could not be stopped. Not even Seattle’s Finest, who were called in by a neighbor could deter a magnificent effort. Really Neighbor, 4:00 in the afternoon? Let’s take this quick opportunity to provide some information. Noise ordinances take affect before 8:00 AM and after 10:00 PM on Monday through Friday and 8:00 AM to 11:00 PM on weekends and holidays. This is directly from the fine officers who were obligated to come by because of the call. “You’re doing nothing wrong so have a great time!” they said, which of course we did. Each officer was rewarded for their temperance with a plate of delicious barbecue. Let’s face it, Trolls are generally loud and they like to be heard but they obey the rule of law, unless they have to eat someone who can’t pay a toll.
I would also like to thank our guest Paul for singlehandedly eliminating the ping pong tournament. It was a dazzling display of inebriation, questionable thinking and lack of coordination. Picture it in slow motion because that is exactly how it happened. Paul decides he needs to take a load off. He scans a parking lot full of tables and chairs but decides his best option is an antique 50’s model ping pong table. Have any of you seen the movie Old School? Remember when Frank the Tank shoots himself in the neck with the tranquilizer gun. It was similar to that but Paul’s fall started with the seemingly inocuous buckling of the first leg of the table and him trying to right himself. Unfortunately the middle of the table caved and another leg collapsed. Cue the spilled beer and the crashing sound which ended with him sprawled out like a wounded pelican flapping on top of a crumpled bed of smashed plywood and bent metal. It was a fantastic effort which culminated when one of our little trolls Liam held up a net post and proudly said “I saved it!” I have to admit, it brought the house down so thank you Paul!
I would like to also thank Court who provided a magical mix of hip hop funky soul reggae. He is available for parties so if you are interested please “Ask the Troll….Anything!”
Thanks to everyone involved, the Troll had so much fun that he may have to make the Grand Opening an annual event.
The Troll