Market and Rate Watch

I never thought I’d see rates on a 30 year fixed at 5.25% with no buydowns. These are unprecedented rates as a result of the TNOTE yield also making history below 3.00%. Friday’s yield on the 10 year note closed at 2.957%, and opened at 2.883%. It is currently trending at 2.80% range.

The stock market has opened way down partly because some profit taking was due to occur based on the multi-day run up last week. However, investors are remaining cautious even after a fairly robust start to Holiday shopping. Shopping volume was up over last year, but with the huge markdowns just to get folks in the door, profits will most likely suffer when all is said and done.

Today brings a couple of economic reports. It would appear, however, that investors have already built these anticipated reports into their trading appetite for the day. The most recent report on manufacturing activity and the report on construction spending are both predicted to show further retraction, once again emphasizing that this recession continues and has expanded globally.

So while stocks continue to reel from the economic misery, the opportunity now exists for those who have been waiting for record low rates to act. Now is the time. Call me to get to out of your ARM now.

James Bowen

Eagle Nationwide Mortgage Co.

315-398-9400

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR TRANSACTION.

Well, the stock markets have reached a level not seen in over 5 years. And the bottom is yet to be seen. The chance of a Fed bailout for the BIG 3 seems more and more unlikely, which is sending consumer and investor confidence down, down,down. The Fed now projects unemployment to jump from 5 year high now at 6.5% to over 7.5% by next year.The Fed continues to hint that the key interest rate will be cut again. The next cut could be 1/2 point which would bring the rate to a level not seen in many years. It is currently holding at 1% and the Fed doesn’t really have much more room to drop. The Nation is looking at “deflation”—that’s a term that I really haven’t even heard before with so much focus on recession and depression. Prices have been dropping rapidly in an effort to get consumers to spend again. But, this actually is exacerbating economic instability which would lead to lower stock prices, lower corporate profits and most importantly, LOWER INCOMES.

So where is the brite spot? Mortgage pricing is also dropping!! The 10 year TNOTE may break a 52 week low today. Early trading is suggesting that the 3.25% yield level will be broken as premarket levels hit 3.29%, down from last weeks level of over 3.70%. Current rates are now at 5.625% for 30 year terms while 15 year terms are at 5.5% and the 5/1 ARM is trending at 5.375%. For a cost of 2pts, the 5/1 can bought down to 4.5%. These rates haven’t been seen in over a year.

Oil prices, home heating oil and gas prices are also dropping at huge rates.How’s this for a statistic-Americans drove 11 BILLION less miles in September than the same time last year.

THIS IS THE TIME TO BUY OR REFINANCE. Of course the catch 22 is that folks must qualify, but the Fed is making attempts to make this happen, it just doesn’t seem to be happening quick enough for most serious buyers or refinance candidates.

As always, I welcome an opportunity to help my real estate colleagues with their clients. I specialize in Federally sponsored products which with Government insurance, may be just the ticket for your clients purchase or refinance. Please reach out to me to see how I can help you.

James Bowen

Eagle Nationwide Mortgage Co.

Rochester, NY Branch

315-398-9400

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR MORTGAGE TRANSACTION.

There is a lot on tap for today’s market investors. The Big news of the last couple days is if the Treasury will dip into the Bailout Bucks and hand over 25 BILLION to keep the automakers afloat. Since the treasury changed their mind about using the money to buy bad loan debt, is it in the Country’s best interest overall to save the BIG 3? After all there are a million plus jobs at stake and many more indirect economical issues that could arise. The BIG 3 and the Head of the Auto Workers Labor Union are all going to the Hill today to appeal for a piece of the bailout pie. This does not have the support of the Republicans on the Hill , so unless there is a change in strategic opinions, it probably will not happen during the remainder of this Administrations Term.

The 25 Billion dollar question is whether it SHOULD HAPPEN. What do you folks think?

Other news that will play a big factor in today’s market mood will be the labor departments release of Producer Prices, the National Association of Realtors 3rd quarter sales and price report, and the National Association of Home Builders monthly data. Most of this news will not be a big surprise, but with weeks of wild Market swings, who knows how this will affect the day’s activity. Citi has also announced another HUGE cut to workforce with half in the USA and half in other countries. HSBC joined in the job cutting spree with 500 jobs lost in Asia. It is becoming clearer and clearer that this economical catastrophe is truly Global.

Treasury Note interest will be high again today. Yield was up and down yesterday, finally settling down .03 to 3.68%. Trading today has already been high which has dropped yield another .04% and this trend is likely to continue.

There may an opportunity to lock lower today as a result of safety buying in Treasury Bonds. Keep your eyes open and and check with your Mortgage Professional.

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR TRANSACTION

As I was reviewing the market activity yesterday, all I could say was “WOW”-it certainly was another WOW day. After a drop below 8000, the DOW swung the other direction suddenly to finish up over 500 PTS. I didn’t really hear any news that should have caused this 900 Pt swing, but it could been driven partly because the Treasury decided not to buy bad loans from troubled asset sheets, but instead to actually invest in these banks taking a degree of ownership. This was viewed as a better way to actually get the bailout bucks directly onto balace sheets and hopefully to get these banks to lend again.

As a result of the market fickleness, Treasuries weakened yesterday and yields increased which did affect pricing in the late afternoon. These yields have again reversed in pre-market trading and there will most likely be increased interest in Treasury notes again today as recent trends suggest profit taking after big market run ups. Today should not buck that trend.

Reports yesterday showed a drop in the Nationwide Mortgage rate averages over the past two weeks. That average is now slightly over 6% for the 30 year fixed term. PAR rates are available closer to 5.75%.

Today’s big news (even though investors have already prepared for it) will be the Commerce Department’s report on retail sales. This is projected to paint a continued portrait of the consumer’s inability to spend. It will also reinforce the effects of the unemployment rate news out yesterday, showing a national average of 6.5%.  What is the rate in your area?

James Bowen

Eagle Nationwide Mortgage Co.

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR TRANSACTION

Stocks continue their decline as retailers have been posting earnings that do not meet estimates and future projections that are adjusted downward. This has again reinforced the market tone which is being driven by the consumers reluctance and inability to SPEND. Consequently, after no Treasury activity yesterday, today begins with a rally to Government sponsored debt, even at lower yields. The 10 year Treasury note started the day at 3.73% after Monday’s close at 3.75%. It is currently down about 7/100ths to the 3.69% range. Pricing is also down slightly with sub 6% rates holding for 30 year terms and sub 5.75% available for 15 year terms. For a cost of roughly 1 1/2 pts., you can save approximately 3/8’s to rate. This is based on a rate sheet received by one of my lenders this morning.

Today’s next big driver will be the Treasury Secretary’s update on the Bailout progress. This is sure to add to the day’s nervousness. We’ll have to wait and see.

James Bowen

Eagle Nationwide Mortgage Co

315-398-9400

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR OWN TRANSACTION

It will be another very interesting week on the Street  just as it has been for weeks on end. There have already been a bunch of events occurring over the past day or two which will provide today’s opening sentiment.

China has joined in the STIMULUS gameplan and the FEDS bought more INSURANCE with another 40 Billion investment in AIG. These factors are suggesting a higher market opening, but eyes are on Ford and GM’s request to join in the BAILOUT BUCKS.

More earnings numbers will be coming out as well which adds to the daily anxiety and ensures more swings this week. If the sentiment maintains for today’s open, there will be less interest in Treasuries and yield should continue to ride Friday’s wave upward. Friday’s close showed a full tenth increase from the open. Pricing was not really impacted much Friday, but I would think that it will catch up to the market by late morning. We’ll have to see if lenders maintain sub 6% PAR rates on the 30 year fixed.

James Bowen

Eagle Nationwide Mortgage Co.

Rochester, NY Branch

315-398-9400

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR OWN TRANSACTION.

Well, I expected sell off yesterday but not 5% off the DOW! This is just another sign that the election euphoria is seriously overshadowed by the reality of where the Country is at right now and how deep rooted the problem is. We are seeing more economic news today showing higher unemployment and weak retail sales. Overseas Bank rates are being adjusted in response to the recent fed drop. This is truly a Global situation. President Elect Obama will certainly have his work cut out for him come January. Investors just can’t seem to jump on the buying train and won’t until Americans show them signs that trends toward spending are increasing. Those signs still appear to be off in the future.

There is a piece of good news that shows up today. Oil is once again down based on huge swings in oil surplus reports, in particular gasoline. Hey, I paid $2.69 yesterday. That’s the cheapest I’ve paid there in quite some time.

This type of market sell off also bodes well for Treasuries, as we know that “generally” there is a large increase in buying interest as these notes have Government backing and are considered to be safety nets. Treasury yields all decreased yesterday as buying spurts increased. The 10 yr note closed down to 3.71% from it’s open at 3.73%. This mornings open has it below 3.70%. This is also “generally” good news for rates and may create an opportunity to lock to your advantage. Yesterday featured several pricing changes, before 30 yr fixed settled at 5.875% and 15 yr fixed at 5.5%.

James Bowen

Eagle Nationwide Mortgage Co.

Rochester, NY Branch

315-398-9400

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR OWN TRANSACTION

History was made as AMERICA spoke loudly yesterday. I don’t think any of us were really surprised by the outcome, but I didn’t think the difference in POPULAR VOTE would have been that wide. There was no question that the electorals would have had the wide swing they did. Even if your candidate did not win, DID YOU EXERCISE YOUR RIGHT TO VOTE?

The BIG election day rally may be reduced with today’s action if investors look to cash in on some of their gains. The 10 yr note bucked the general trend of yield increase with market surges yesterday as DEMAND for the longer term safety bond was also steady. The previous day’s open was 3.94% and close was 3.76%-that’s almost a 2 tenths drop in yield. The last of many rate changes I saw yesterday showed the best fixed 30 yr back at 6% and the 15 yr at 5.625%. They can be bought down by roughly 1/2 PT.

So keep on eye to see where the “MOOD SWINGS” today and how much selling for profit occurs. CAN ELECTION RALLY CONTINUE?

James Bowen

Eagle Nationwide Mortgage Co.

315-398-9400

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR TRANSACTION

Stocks began the day with a huge rally, but then the effects of realism set in with a few more disappointing, but not unexpected reports coming out. Currently, most sectors are still showing positive and the market is still up slightly but investors are once again reminded that most indicators are now signalling recession. The one huge report out shows that Gross Domestic Product figures point to the largest reduction since 1980. Consumer spending appeared to be the biggest driver of this figure, with a 3+% decrease in the 3rd Quarter. Going hand in hand with this report is that disposable income is down 8.7%, the largest quarterly drop in over 60 years. Other not so encouraging news is that while weekly unemployment figures did not increase, they did miss the expected figure which was a bit lower than actual numbers, and overall unemployment is sitting at 6.1%. This is another sign of recession and AMEX won’t help this situation as they report they will be reducing their workforce by 7000.

The 10 yr Bond is following the same pattern as stocks are today. After a big run up to over 3.96%, it has settled back to the 3.91 range–still up from yesterday’s close. Rates are reflecting this yield curve as well, with 30 year fixed rates now running near 6.375%, well above last weeks rates.

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR TRANSACTION

The market really doesn’t have a direction this morning as investors are waiting for the FED to make another cut to the Bank Rate. Other countries have already done it, and this decision is widely anticipated. Will it be the 1/2 point or will the FED leave the door open for another cut in December? This anticipation follows yesterday’s furious frenzy that ended with huge gains for stocks and less of an appetite for government safety nets such as the 3 yr treasury which shot up in yield and the 10 yr note which also followed suit. Yield hasn’t moved much from yesterdays close , up just one tenth to 3.83%. Rates did jump a bit yesterday, but 6.25% is still available at no buy down cost on the 30 year conventional.This afternoon’s announcement may begin the barrage of repricing, and I would not think it would be for the better. Keep your eyes open later today.

In other news hot on the wires is the latest report on manufacturing activity for large tickets. This showed the largest gain in a full quarter, but it was primarily due to the transportation sector. Commercial aircraft orders were up and all those factory incentives on autos paid off for numbers, but profit suffered big on them. So did they actually make out overall, by sacrificing so much on each deal just to sell a unit?  Of course the consumer will say yes, so get while the gettin’s good I guess. The next big question is, “when will consumer spending begin to buck the trend on staples needed for everday life?”….don’t remember the last time I thought of buying a commercial aircraft.

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR OWN TRANSCATION