Market Forecast 01/30-2/03

Here is this the market forecast for the week of 1/30-2/3.  Rates dropped this week thanks to the Fed announcing LOW RATES THROUGH 2014!  So if you know anyone looking to buy or refi, have them give me call!

 

 

Market Comment Mortgage bond prices were higher last week which pushed mortgage interest rates lower. Rates were helped considerably by the Fed announcement which indicated they would try to keep rates low through 2014. This was a significant revision to prior remarks which set 2013 as the timeframe. The Fed went on to note that global markets pose significant downside risk to the US economic outlook and inflation remains subdued. Much of the data released was bond friendly. Higher than expected weekly jobless claims and weaker than expected GDP data helped rates hold the improvements towards the end of the week. Mortgage bonds ended the week better by almost a discount point. LOOKING AHEAD Economic Indicator Release Date & Time Consensus Estimate Analysis Personal Income and Outlays Monday, Jan. 30, 8:30 am, et Up 0.2%, Up 0.1% Important.  A measure of consumers’ ability to spend.  Weakness may lead to lower mortgage rates. PCE Core  Inflation Monday, Jan. 30,  8:30 am, et Up 0.1% Important.  A measure of price increases for all domestic personal consumption.  Weaker figure may help rates improve. Q4 Employment Cost Index Tuesday, Jan. 31, 8:30 am, et Up 0.2% Very important. A measure of wage inflation.  Weakness may lead to lower rates. Consumer Confidence Tuesday, Jan. 31, 10:00 am, et 63.5 Important.  An indication of consumers’ willingness to spend.  Weakness may lead to lower mortgage rates. ADP Employment Wednesday, Feb. 1, 8:30 am, et 280k Important.  An indication of employment.  Weakness may bring lower rates. ISM Index Wednesday, Feb. 1, 10:00 am, et 54 Important.  A measure of manufacturer sentiment.  Weakness may lead to lower mortgage rates. Weekly Jobless Claims Thursday, Feb. 2,  8:30 am, et 375k Important.  An indication of employment.   Higher claims may result in lower rates. Preliminary Q4 Productivity Thursday, Feb. 2,  8:30 am, et Up 2.0% Important.  A measure of output per hour.  Improvement may lead to lower mortgage rates. Employment Friday, Feb. 3,  8:30 am, et 8.5%, Payrolls +200k Very important.  An increase in unemployment or weakness in payrolls may bring lower rates. Factory Orders Friday, Feb. 3,  10:00 am, et Up 1.7% Important.  A measure of manufacturing sector strength.  Weakness may lead to lower rates. ISM The Institute for Supply Management (ISM), formerly the National Association of Purchasing Management (NAPM), releases the “Report on Business” on the first working day of each month. Part of this report is the “diffusion index,” which tracks the economy’s ups and downs fairly well. In conducting this survey, the ISM questions purchasing executives from over 250 industrial companies compiling data on production, orders, commodity prices, inventories, vendor performance, and employment. Each of the respondents is asked to rank the categories as “up” or “down.” Various weights are applied to the individual components to form the composite index. A composite index reading of 50 can be thought of as a “swing point.” A reading above 50 implies an increase in economic activity, while a reading below 50 indicates a decline. The ISM report is difficult for economists to forecast because there is little data upon which to base an educated guess. The report has a large “surprise factor” and can cause market swings.

 

Mark Ruhl

NMLS #105591  |  Loan Officer

Mortgage Express

Direct    503.517.9341

Cell         503.317.7620

Fax         503.961.8694

http://www.markruhl.com

 

*This electronic mail could contain confidential or privileged information and unauthorized use, copying or distribution other than by the intended recipient is prohibited. In the event you received this communication in error, please notify the sender.  Equal Housing Lender

 

Market Forecast 01/09-01/13

In addition to next week’s market forecast, I thought I would send this chart over.  Please forward this bit of info along to anyone you know that is on the fence about buying, and warn them about the potential for rates increasing.  If they have any questions, feel free to have them call me anytime!

 

 

Here is next week’s market forecast:

 

Market Comment

Mortgage bond prices were slightly higher last week, which kept mortgage interest rates relatively in check.  We started the week with worse rates as stocks surged higher following the extended holiday weekend and the DOW was up 225 points at pricing Tuesday morning.  Fortunately, weaker than expected factory orders data Wednesday helped reverse the upward trend in rates and got us back near unchanged on the week.  The European debt crisis continued which generally helped US debt instruments.  Mortgage bonds ended the week unchanged to better by approximately 1/8 of a discount point.

The Treasury auctions this week will provide an indication of foreign appetite for US debt.

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
3-year Treasury Note Auction	Tuesday, Jan. 10, 1:15 pm, et	None	Important.  Notes will be auctioned.  Strong demand may lead to lower mortgage rates.
10-year Treasury Note Auction	Wednesday, Jan. 11, 1:15 pm, et	None	Important.  Notes will be auctioned.  Strong demand may lead to lower mortgage rates.
Fed “Beige Book”	Wednesday, Jan. 11, 2:00 pm, et	None	Important.  This Fed report details current economic conditions across the US. Signs of weakness may lead to lower rates.
Weekly Jobless Claims	Thursday, Jan. 12, 8:30 am, et	365k	Important.  An indication of employment.   Higher claims may result in lower rates.
Retail Sales	Thursday, Jan. 12, 8:30 am, et	Up 0.2%	Important.  A measure of consumer demand.  Weakness may lead to lower mortgage rates.
30-year Treasury Bond Auction	Thursday, Jan. 12, 1:15 pm, et	None	Important.  Bonds will be auctioned.  Strong demand may lead to lower mortgage rates.
Trade Data	Friday, Jan. 13, 8:30 am, et	$43b deficit	Important.  Affects the value of the dollar.  A falling deficit may strengthen the dollar and lead to lower rates.
U of Michigan Consumer Sentiment	Friday, Jan. 13, 10:00 am, et	65.5	Important.  An indication of consumers’ willingness to spend.  Weakness may lead to lower mortgage rates.

Employment Results

The December employment report came in stronger than expected with the headline rate surprisingly lower and the jobs figure better than expected.  Fortunately stocks took a dive later Friday morning and rates were able to rebound a little later in the morning recovering the initial weakness.    Unemployment came in at 8.5%, considerably better than the 8.7% rate that was expected and not bond friendly.  The payrolls component showed jobs increased 200,000 compared to the 150,000 increase expected by analysts.  The mortgage bond market had an initial negative reaction to the report.

The Bureau of Labor Statistics (BLS) of the U.S. Department of Labor compiles data from two different surveys, the household survey and the establishment survey, in order to complete the employment report.  This explains why sometimes there is a divergence between the unemployment rate and payrolls figures each month.  The payrolls figure usually receives the greater weight from analysts but the headline figure covers the news headlines.

Job gains occurred in transportation and warehousing, retail trade, manufacturing, health care, and mining.

 

Mark Ruhl

NMLS #105591  |  Loan Officer

Mortgage Express

Direct    503.517.9341

Cell         503.317.7620

Fax         503.961.8694

http://www.markruhl.com

 

*This electronic mail could contain confidential or privileged information and unauthorized use, copying or distribution other than by the intended recipient is prohibited. In the event you received this communication in error, please notify the sender.  Equal Housing Lender