Danny Salas

Archive for January, 2010

Chico, CA Interest Rates Market Report – Economic Influences – January 8, 2010

We Lost More Jobs Than Expected

Surprise, Surprise

Well,  my calculations proved incorrect, however, it’s important to understand what’s happening with rates.  We lost 85,000 jobs, last month, and only expected to lose 35,000.  Immediately, rates benefited, however the market has already corrected itself and moved back to yesterday’s pricing.  Here’s why:  Revisions to Novembers 11,000 job losses, actually turned things around to a gain of 4,000 jobs.  This is the first time we’ve seen a gain, in the jobs numbers, since December of 2007.

Why Rates Moved Back

Traders, basically, took advantage of yesterday’s pricing.  That’s exactly why locking was so important yesterday. And, as you can see, it’s exactly what happened, even though we lost more jobs than we thought we were going to.

Off To Repel Into A Deep Cave

Sorry limited time today.  Going down the underground river, repelling down into a deep cave, and zip-linin’ through the forest and around the Tulum Ruins.  Will touch base when I can.

What To Subscribe To:

Get Our Twitter Updates
Get Our Blog Blast
Connect With Us On Facebook

Chico, CA Interest Rates Market Report – Economic Influences – January 7, 2010

Jobs Numbers Released Tomorrow

Greetings From The Riviera Maya

Sorry about yesterday’s post…I was traveling through Phoenix with a 2 1/2 hour flight delay, before hitting the Aventura Spa Palace, near Playa del Carmen.  I’ll see about posting pictures, later.

Initial Jobless Claims

Interest Rates took a smack in the face, yesterday, however, managed to close the day, only slightly effected.  The net result was about a loss of about .125% in rate.  The volatility continues today, as the market tries to decipher what to do with today’s better than expected Initial Jobless Claims number.  The market expected 439,000 new claims, however, came in at 434,000.  Also, of interest, was that the number of continuing claims is down to 4.8 Million, as opposed to last week’s 4.9 Million.  Here’s what to be careful of, though; people’s unemployment compensation is expiring, or running out.  So, there are still millions that are collecting emergency benefits that are not calculated in the continuing claims numbers.

Auctions Next Week

The Fed will be announcing next week’s auction numbers, today.  Remember, these auctions can be true market shakers, so be prepared.

The Bank of England

The Bank of England left its overnight rate unchanged, at 0.5%.  This is still their historic low, but there are concerns that they will increase their rate, starting next month.  This could have another negative effect on the dollar.

Extension Of The MBS Purchase Program?

The Fed has stated, at its last two meetings, that the Mortgage Backed Security Purchase Program will expire in March of 2010.  However, the minutes from their last meeting, were released yesterday, and there is some heavy discussion regarding concern, from some Fed members, that the program is going away.  Their next meeting is January 27.  It will be interesting to see if they continue to discuss ways to continue a similar type program or extend the program even further.

Locking Advice

Today is probably going to be an excellent day to lock.  Tomorrow, Jobs Numbers come out, and the estimates are all over the place.  Initially, they expect no movement away from last month’s figures.  However, yesterday, they expected 35,000 job losses.  This makes it easier to just lock in.  Simply because if things are better than expected, rates will rise.  Predicting a loss in jobs is kind of a safe position, because it would truly be a surprise if we lost more than 35,000 jobs.  I think I’d play it safely!

What To Subscribe To:

Get Our Twitter Updates
Get Our Blog Blast
Connect With Us On Facebook

Chico, CA Interest Rates Market Report – Economic Influences – January 5, 2010

Still Attempting a Modest Correction

Rates Still Trying A Reversal

Mortgage-Backed Securities are still trying to break away from the high’s of November 25.  We’re currently up almost 30 basis points.  Coupled with yesterday’s modest gains, interest rates will cost about 0.5% Point less than the same rate, on Friday.

Stocks Set For The Year?

Traditionally, since 1973, when stocks do well (on the first trading day of the year), they do quite well the rest of the year.  And Stocks did quite well, yesterday.   We’ll have to watch this and see how the rest of the year pans out.

Pending Sales…Take With A Grain of Salt

The National Association of Realtor’s Pending Home Sales Report has been released this morning.  Now, before I relinquish the results, let’s keep in mind that November was a month that many first time home buyers were sitting on the fence, wondering if the first-time home buyers’ tax credit would be extended or amended.  With that in mind, take a 16.0% decline in these figures with a grain of salt, and expect these numbers to get better, in the coming months.

Locking Advice

We’ll carefully float, into the day.  However, it’s important to know that we only have another 50 Basis Points to move, until we hit the 200-Day Moving Average.  So, there’s not a lot of economic information, or other news, that could really help rates much more than what we have today.  So, we’ll float, just in case we can hit that 200-Day limit.  If we do…we’ll float until we see a reversal and lock before banks have an opportunity to change their rates.

Related Must Reads

Why Buy Now…Why Rate Outweights Price
Buyers WAKE UP!
House Passes Tax Credit Extension
What Moving Averages Can Do

What To Subscribe To:

Get Our Twitter Updates
Get Our Blog Blast
Connect With Us On Facebook

Chico, CA Interest Rates Market Report – Economic Influences – January 4, 2010

Rates Trying To Correct Huge Loses

Decade’s First Day Sees Rates Decline

Interest Rates are declining for the first trading day of the decade.  It looks as though rates are trying to make a move into better territory, after they have just been pummeled since November 25th.  Keep in mind that we’re, now, in 2010; and the Government Mortgage-Backed Security Purchase Program will be ending in three months.  So, even if rates make a modest comeback, it will only be exactly that:  Modest!

$140 Billion Left

That’s right!  Out of the $1.25 Trillion, there is only $140 Billion Left.  Once the government is unable to buy bonds, to keep rates down, we’ll see quite an interesting shift in where rates will be.  A steady climb into the sixes, is what I predict for next summer.

When (a governing board member) Speaks…

Atlanta Fed President Dennis Lockhart will be speaking at the American Economic Association Conference today.  Whenever a governing board member opens their mouth, markets can react nervously.  So be prepared!

Related Must Reads

Links To, “When Bernanke Speaks”
Higher Rates…Period!
Locking Advice! From September 24. 2 Reasons Rates Will Rise

What To Subscribe To:

Get Our Twitter Updates
Get Our Blog Blast
Connect With Us On Facebook