Cari Anderson's East Bay Mortgage Update for September 3rd 2010
Economic News: The stock market has done well this week and is poised to end a three week downturn. Much of this week's economic data was better than expected which boosted equities and hurt bonds.
On Monday Personal Income & Outlays were reported for July. Consumer Income rose .20% month over month and year over year showed a rise of 3%. Consumer Spending was up .40%, beating estimates, and rose 3.4% over last year.
On Tuesday it was reported that the Case-Shiller Home Price Index for June rose 1% month over month and 5% year over year. Keep an eye out for the July and August numbers for an indication of what we can expect for the remainder of the year. Also reported was Consumer Confidence for August at 53.5. This was up from July's revised reading of 51.0.
Wednesday brought us the ISM Manufacturing Index for August. The numbers came in well above consensus at 56.3 and, while there is some concern with the softening of new orders, it was a solid report.
Initial Jobless Claims were reported on Thursday at 472,000 and have trended downward over the past two weeks. Continuing Claims also fell and the four week moving average was lower by more than 100,000 from last month's report. Thursday also held the Pending Home Sales Index. The index rose to 79.4 for July with gains reported in all regions which could help with the Existing Homes Sales reports for August and September.
Lastly, Friday brought us the much awaited Employment Report. While the overall unemployment rate inched up to 9.6% (the government shed 121,000 jobs and 114,000 of those were census workers) there was some positive data in the report. Private industry added 67,000 jobs and there was a slight uptick in average hours worked as well as wages.
Mortgage Markets: The 10 Year Note is losing ground this morning with the yield rising to 2.713% and Mortgage Backed Securities are under a little pressure and fixed rates are a little worse while ARM's remain stable.
Next Week's Reports: A quiet week for data. Thursday: International Trade & Jobless Claims.
Stay tuned for the Next East Bay Mortgage Update...
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Economic News: There is really nothing to note in the way of economic releases today (which is probably a good thing considering the week's reports thus far). This time of year provides volatile markets due to lower volume with many participants on the sidelines enjoying the last two weeks of August. Yesterday's Jobless Claims, Leading Economic Indicators and the Philadelphia Fed Survey were not as positive as some hoped. No need to share any more negative economic news this week. Next week has a pretty decent number of important reports which has the potential to impact both the equity markets and interest rates. To borrow a quote from Rob Chrisman's 
Mortgage Markets: The yield on the 10 Year Note is steady this morning and is currently trading at 2.566%. The Mortgage Backed Securities market is steady after a bit of a choppy week. Rates remain at tremendous levels and opportunities abound in both the purchase and refinance sectors.
Economic News: Yesterday's Jobless Claims report was a bit disappointing. With the week ending July 31st the initial jobless claims rose 19,000 to 479,000. The four week moving average is still below last month's level which is a positive. Today's Employment Report was not taken well by the market and equities are experiencing a broad selloff. On a brighter note the underlying data exposed some good news with a gain in both wages and average weekly hours worked.
Economic News: Tuesday's report on Personal Income & Outlays (reflecting June 2010 results) showed that from a month over month comparison both income and spending were flat. Looking at a year over year time horizon personal income was up 2.6% and consumer spending was greater by 3.1%. Yesterday also had the Pending Home Sales Index (again reflecting June 2010 results) fell 2.6% from month to month and stands 18.6% lower than year ago levels. Wednesday's data was a little brighter with the ADP Employment Report expecting a rise in private sector payrolls of 42,000 for July. In addition, the ISM Non-Manufacturing Index (which represents the service sector) was better than expected.
Economic News: Yesterday's Case-Shiller Home Price Index results for May showed continued strength. This index represents a three month moving average and for this report contained March, April & May data. Consumer Confidence was also on the docket yesterday and came in slightly less than expectations at 50.4 mainly driven by the stubborn employment market. Lastly, Durable Goods Orders were announced this morning for June and came in below consensus with the transportation component accounting for a large part of the decline. The Beige Book Report (a report on economic conditions released about 8 times a year ahead of the Federal Open Market Committee (FOMC) meetings) will be released at 11:00 AM PST.
Economic News: A fairly quiet week for economic reports was led off Monday with the Housing Market Index. This report by the National Association of Home Builders reflects the builder sentiment. The index fell to 14 which is the lowest since April of 2009. Housing Starts were announced yesterday and while the numbers were a bit disappointing there was optimism with the gain in housing permits. 
Economic News: Yesterday's Producer Price Index (PPI) came in lower than expected influenced by a drop in the food & energy prices. The PPI inflation fell .50% on top of a .30% drop we experienced in May. Weekly Jobless Claims fell 29,000 to 429,000 which is good news. On the other hand continuing claims rose by 247,000 to 4.681 million. Industrial Production results were at the high end of consensus but were a little muted. This mild slowdown comes on the heels of gains we have experienced over the past year. Today's Consumer Price Index (CPI) showed a third consecutive decline led mainly by lower energy costs and, taken with the PPI data, shows no inflation in the pipeline at this time. Finally, Consumer Sentiment came in well below expectations with a reading of 66.5 which is the lowest since March of 2009. The recent declines in Consumer Sentiment have been partially attributed to the effects of the gulf oil spill and we can only hope that the cap which has stopped the flow of oil will be a success.
Economic News: Yesterday's International Trade figures reveled an unexpected widening in the trade gap but there was a positive reading for US exports as they expanded across all sectors. Today's Retail Sales Report was a tad worse than expected but the electronics & appliance sector sported nice gains. The Federal Open Market Committee (FOMC) will be releasing the minutes from their last meeting at 11:00 AM today.