Florida Mortgage Rates - Midday Report
By Florida's #1 Mortgage Planner | August 20, 2008
Locking Stance: CAUTIOUSLY FLOATING Mortgage Bonds: +31bp
It is definitely time to float those loans, at least for today. I forgot about this morning’s crude inventories, especially since they usually don’t affect the markets much. This morning’s report about greater than expected inventories was different.
As I said, the Crude Inventories data doesn’t normally amount to much in the mortgage bond markets, but absent any other news brings quite different results at times, today being one. With the report this morning, oil prices have reversed themselves, taking away inflationary expectations that I mentioned earlier and bonds are rallying as a result.
The charts are now starting to paint a much brighter future for mortgage rates, though still too early to tell the long term future. For now, floating is the best and will likely save you thousands on each loan.
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Florida Mortgage Rates - Morning Report
By Florida's #1 Mortgage Planner | August 20, 2008
Locking Stance: CAUTIOUSLY FLOATING Mortgage Bonds: +9bp
Mortgage bonds have managed to break above their 50-day moving average this morning, so we finally may see rates swing direction. I still remain very skeptical about their future, but the fact that they are able to move higher as stocks move lower is a good sign.
As I stated before, the charts still paint an ugly picture, but that picture may be changing. With no news today, stocks are driving bonds higher as they plummet. Oil is also on the rise again,. so inflation fears could return to the markets if this move higher is not simply a correction.
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Florida Mortgage Market - Evening Report
By Florida's #1 Mortgage Planner | August 19, 2008
Locking Stance: LOCKING Mortgage Bonds: +3bp
Mortgage bonds went nowhere today, eking out a measly 3bp while the stock market tumbled over 130 points. I didn’t mention housing earlier, but the numbers were not good, but they were essentially as expected.
Overall the feelings are mixed on inflation. The numbers show inflation very high, the highest in 27 years, based on the last PPI, CPI and PCE (Fed’s favorite), but thoughts remain focused on oil prices having dropped. With oil prices still lower than their peak, feelings are that inflation will moderate down the road, especially since the dollar seems to be holding its own as well. All I can say is thank God for the global economy and the fact others are beginning to go through what the US did.
Once again, on the technical side of things, we are certainly not out of the woods yet, but there is some hope on the horizon if bonds continue to hold their ground or make some new gains.
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Florida Mortgage Rates - Midday Report
By Florida's #1 Mortgage Planner | August 19, 2008
Locking Stance: LOCKING Mortgage Bonds: +3bp
Mortgage backed securities are failing to do anything today, despite this morning’s news. With everything that was released this morning, coupled with the fact oil prices are spiking again, one would think that bonds would be headed lower.
So why aren’t they?
In one word, stocks. Stocks are plunging today and that means money flows into bonds, a fundamental that remains almost guarantee throughout the years. With stocks dropping, almost inevitably bonds will rise. The reason they are not rising further is due to this morning’s news.
Looking at the charts, the fact bonds continue to hold their ground is a good thing. Stochastic indications remain on the overbought side and the overall trend is still to the downside, so odds still favor lower prices. That being said, the picture could change dramatically in the coming days, especially if MBS respond favorably to the Philadelphia Fed Index.
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Florida Mortgage Rates - Morning Report
By Florida's #1 Mortgage Planner | August 19, 2008
Locking Stance: LOCKING Mortgage Bonds: 0bp
Well, PPI hit the airwaves moments ago and the markets just don’t know what to do apparently. One of the things I have talked about is the fact that producer prices hadn’t been increased enough to cover their costs, followed by retailers not being able to do the same, thus inflation would continue even though oil prices have come down. Today’s numbers show producers jacking prices up finally.
Both overall and core PPI beat expectations in this morning’s report and that will weigh somewhat heavy on mortgage bonds. In fact, PPI, like the recent PCE report, showed inflation at its highest level since the early 1980s, hardly what Stern’s words showed (he has been trying to calm the markets saying the economy looks like the early 1990s, the period just before a boom). PPI itself came in at 1.2%, more than double the expectations of 0.5%. At the core level we see 0.7%, over three times expectations of 0.2%. PPI at an annual rate is just shy of 10% (came in at 9.8%).
OK, but bonds aren’t moving just yet, sp we have some strength, right? Well, not likely. Chances are traders are somewhat shocked and that mortgage bonds will be falling as the news gets digested. If you haven’t already, get that loan locked.
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Florida Mortgage Rates - Evening Report
By Florida's #1 Mortgage Planner | August 18, 2008
Locking Stance: LOCKING Mortgage Bonds: -3bp
What can I say? Mortgage bonds went nowhere today as I expected, given the lack of data and no real significant news. The rumor mill is running rampant and housing concerns remain, along with continued concerns over the financial markets.
The good news is that bonds are still holding above their 25-day moving average, but we cannot call it support just yet. Bonds traded both higher and lower today, remaining basically flat, showing their indecisiveness. Technical indications still favor lower prices overall, so I remain in a locking stance until the “future” begins to look better.
Tomorrow brings data from both sides, so watch out. PPI will be reported along with news on the housing markets. Expect higher inflation numbers, likely expected by traders already, but watch for better than expected numbers in housing. I will be on hand as the data flows to provide timely reports, at least for the beginning.
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Florida Mortgage Rates - Midday Report
By Florida's #1 Mortgage Planner | August 18, 2008
Locking Stance: LOCKING Mortgage Bonds: +6bp
I see no reason to change stances right now as mortgage bonds show no signs of any real movement. No data released today places news as the “guiding light” and there hasn’t been much unexpected news.
Fannie Mae and Freddie Mac will be bailed out by the US Treasury, as expected, according to a Baron’s article and oil is ticking a little higher again. Beyond that all is quiet for the most part. As I have said before, the bailout of Fannie and Freddie will cost taxpayers and the Barron’s article shows that to be true, at least for stockholders, as the bailout will wipe out common stock.
I am now heading to Dallas and will be in the air just about the remainder of the trading day. I will give my standard recap report once I get to the hotel. Until then, happy Monday and for those of you in South Florida, stay dry if you can.
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Florida Mortgage Rates - Morning Report
By Florida's #1 Mortgage Planner | August 18, 2008
Locking Stance: LOCKING Mortgage Bonds: 0bp
It is still about an hour before the market opens, but again I find myself in my other office today, so here is what I am expecting for now.
Bonds rallied Friday despite CPI reaching the highest in 17 years. There is no data to present itself today that will change that effect, but news can easily sway bonds as the day progresses.
Technically, bonds have broken above their 25-day moving average which is a good thing, if they can hold on. There are some concerns when looking at the charts and they still show an overall negative picture at the moment. My next report will be about midday, so I can inform you exactly what is going then, while passing through San Juan, PR.
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Florida Mortgage Rates - Morning Report
By Florida's #1 Mortgage Planner | August 15, 2008
Locking Stance: LOCKING* Mortgage Bonds: +16bp
I will get into the reason for the asterisk in a minute, but let’s breakdown what is going on right now. Mortgage bonds dropped initially, but have since gained ground and are looking fairly good this morning.
The dollar has continued to strengthen and oil prices have been dropping back below $113. Bonds have shrugged off a much better than expected Empire State Index. Capacity Utilization and Industrial Production also beat expectations, that data being delivered short time ago. These reports are not major players in the markets, but the data is not favorable for mortgage rates.
Now, for the reason for the asterisk. First, with unfavorable data and the upcoming Consumer Sentiment, the markets could easily swing lower, and that would not surprise me. The asterisk is due to my being called out for a flight that happens to depart about the same time as the sentiment’s release, so I will be decidely out of the office the remainder of the day and unable to report and thus I am back to a locking stance based on expectations, though floating may prove beneficial if the sentiment is dismal (not likely).
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Florida Mortgage Rates - Evening Report
By Florida's #1 Mortgage Planner | August 14, 2008
Locking Stance: CAUTIOUSLY FLOATING Mortgage Bonds: +25bp
As we wrapped up the day, mortgage bonds ended at their highs, so there is some hope for gains tomorrow. A lot happened throughout the day and the result was both stocks and bonds rallying a little.
First, just as the charts predicted, bad news on the inflation front. Then bad news on the job front. Then strengthening dollar leading to lower oil prices and expectations that the Fed will start raising rates finally. Then Minneapolis Fed President Stern spoke up to say the economy resembled the early 1990s, meaning higher unemployment, weak recovery, and lower inflation if energy prices stabilize.
After all the news got digested, the lackluster economy won the battle today, but only by a narrow margin and due mostly to the CPI data being somewhat priced into the markets already. Tomorrow will see some more economic data flow, so the question will be whether or not bonds can gain some more ground. While the big picture remains negative, there may be some gains to be had tomorrow, so I am going to hold the CF stance.
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