Danny Salas

Archive for the 'Weekly Market Report' Category

Chico, CA Interest Rates Market Report – Economic Influences – April 14, 2010

Technical Factors Will Determine Interest Rates

Stocks Poised For Rate Adjustments

Technical factors will provide the path for interest rates, this morning.  Earnings’ season is upon us, and as reports roll out, through the next few weeks, Stocks and Bonds will be all over the board.  The market has already priced itself for healthy reports, so anything different, like Alcoa’s shortfalls, will likely cause nervousness in the market.  I’m not sure, but I have a hunch that Stocks might suffer a bit, which will benefit interest rates, as investors move to the safe-haven of Bonds and Mortgage-Backed Securities.  It will be fun to watch.

Inflation In Check

Couple of things happening this morning.  The Consumer Price Index (CPI), and Core CPI came in at very low levels.  As a matter of fact, the year-over-year Core CPI is measuring at 1.1%.  It’s the Fed’s desire for inflationary measuring devices, is to stay within 1.0%-2.0%.  So this cool reading has led Fed Chairman Ben Bernanke to continue to state that interest rates will remain low, for “an extended period of time.”

Retail Sales Up

Consumer spending has increased, compared to last month’s dismal numbers.  Spending is up 1.6%, but it’s not certain as to whether this swing is due to a healthier economy, or better weather, as spring rolls in.

FOMC Meeting Scheduled

This month, April 27-28, The Federal Open Market Committee will gather together to discuss the economic status of the country.

With Good Interest Rates Available...

Locking Advice

Today’s a tough call.  I think we still take advantage of where rates are, however, if you’re still looking for a home and cannot lock into an interest rate, don’t be too alarmed.  Even though there is a lot of resistance to lower rates, the Stock Market has already priced in exceptional earnings predictions, and I’m just not so sure that, with Alcoa’s lead, other companies might show similar difficult times, as well.  It’s going to be a bumpy ride, but hang in there.

Related Must Reads

What “Extended Period” means for Interest Rates

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Chico, CA Interest Rates Market Report – Economic Influences – March 31, 2010

The Market Is One Nervous Nelly!

This Is The End

My Only Friend…The End, of purchasing Mortgage-Backed Securities (MBS) by the Federal Reserve.  The Doors have been closed, on the $1.25 Trillion that the government set aside to buy these securities.  It was “my only friend”, due to keeping mortgage interest rates low for an unprecedented amount of time.  Now, the Fed is going to have to start selling those MBS to the private sector.  They’re not quite ready to do that, however, doing so, they will have to increase the yields, of these Bonds, to be profitable for those investors.  Therefore, higher yields equates to higher interest rates.

A.D.P Is O.F.F.?

American Data Processing (ADP) is the nations largest payroll company.  The have a tendency to report inaccurate figures, and today, the market interpreted what ADP said as bad news for the job market.  Twenty-three thousand jobs were lost, in March, in the private arena.  The government expects 40,000 private sector jobs created in March.  So, the discrepancy is wide.  Also, the ADP numbers do NOT take into consideration government jobs and the temporary census jobs created.  So, total numbers are expected to be an additional 190,000 jobs reported tomorrow.  So, when ADP reports a loss, Stocks suffer on the news, and Bonds and interest rates benefit.  However, once the market absorbed the fact that ADP is often incorrect, coupled with the fact that the ADP numbers do not account for government jobs or census jobs, interest rates suffered.

Take Advantage And Lock While Ya Can!

Locking Advice

Mortgage-Backed Securities have managed to wriggle their way down below all trend line levels of support.  The only support, they current have, is a trading level that the market hasn’t been at for quite some time.  So, we’ve been squeezed into a very small area of trading back and forth, between support and resistance.  With tomorrow’s jobs numbers, truly not expecting to be a huge surprise, I would take advantage of the opportunity to lock.

Related Must Reads

The First Extension of The $1.25 Trillion MBS Government Purchase Program
2007 Example of A.D.P being O.F.F.
Trend Lines: How They Support or Resist Interest Rates

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Chico, CA Interest Rates Market Report – Economic Influences – March 19, 2010

YOU DON’T WANT TO MISS THIS EVENT!!!

Scott St. John will be speaking at The Big Room At Sierra Nevada The , Friday, March 26, 2010.  Scott is a 3rd-Term Governing Board Member of Freddie Mac.  You’ll have an opportunity to inquire into expected economic future of the United States, Real Estate and its REO future, and what’s happening behind the scenes that is making closing loans to more timely and difficult, these days.   REGISTER AT THE CHICO OR PARADISE BOARD OFFICES.  $10 includes appetizers.  $15.00 AT THE DOOR!

JUST ANNOUNCED!!!!

Joining us on Friday, March 26th is Private Mortgage Insurance Company’s (PMI) own Nancy Early.

Nancy has been with PMI for 8 years and in the Mortgage Industry for 25 years. She supports  Northern and Central California, Northwest Nevada and Hawaii and lives in Roseville, California.  Come learn about some of the structured transactions that MI companies are using to lower buyer’s monthly obligations.  We’re excited to add her to the venue.

We Were Down 19, To Be Par Already Today

Rates Taking Direction From Stocks

There are no market mover announcements effecting interest rates, today, so technical factors will influence Mortgage-Backed Securities’ direction.  And that they have done!  Typical to common markets, Stocks shot off this morning, causing rates to increase, relatively substantially, until, yet another credit rating company announced their concern over the AAA rating of large economies, including the United States.  Fitch Ratings mentioned that the United States has some difficult decisions to make regarding spending.  Thanks for that enlightening information, Fitch.  With that announcement, rates came plummeting back down, and Stocks did, too.

Short For Time Periods...May As Well Lock

Locking Advice

Read yesterday’s advice.  It still stands!

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Chico, CA Interest Rates Market Report – Economic Influences – March 12, 2010

YOU DON’T WANT TO MISS THIS EVENT!!!

Scott St. John will be speaking at The Big Room At Sierra Nevada, Friday, March 26, 2010.  Scott is a 3rd-Term Governing Board Member of Freddie Mac.  You’ll have an opportunity to inquire into expected economic future of the United States, Real Estate and its REO future, and what’s happening behind the scenes that is making closing loans to more timely and difficult, these days.   REGISTER AT THE CHICO OR PARADISE BOARD OFFICES.  $10 includes appetizers.  $15.00 AT THE DOOR!

We're All Over The Place, This Morning

Stocks Battling Resistance

Just like Bonds have Trend Lines that are tough to crack, so do stocks.  The S & P 500 had a difficult time breaking through a tough line of resistance at the 1,150 level.  This helped Mortgage-Backed Securities push back up after tail-spinning down 28 Basis Points, early in the morning.  Then, the Consumer Sentiment report came out weaker than expected.  However, as you dissect the particulars of Consumer Sentiment, it shows that One-year inflation expectations rose to 2.8% in March from 2.7% in February.  So, Bonds are now struggling and Stocks are taking more of a bullish attitude.

What The Appointment of Janet Yellen Means

This is, of course, speculation, however, history shows us that Janet Yellen favors lower rates, even at the risk of higher inflation.  President Obama has slated her for the Vice-Chairman position.  The concern, here, is that the world is watching.  With inflation risks looming in the air, investors will tread lightly about investing in fixed mortgage security instruments, and this could cause rates to climb, quickly.

Retail Sales Surprise

That’s right.  Even in light of the horrible, icy storms all over the country, Retail Sales rose 0.3% in February.  Yesterday, we commented on how this would effect rates, particularly when we expected a -0.2% drop.  When stripping out automobile sales we climbed a remarkable 0.8%, while only expecting a modest 0.1% increase.  This is truly news.

Consumer Sentiment

As mentioned above, Consumer Sentiment was a dismal figure, however, when breaking down the particulars, the market noted that inflation expectations are steadily increasing.  Coupled with today’s other inflation concerns, and knowing from reading this article that inflation is the nemesis of interest rates…you see the writing on the wall?

We've Bounced Off of The 200-Day 2 X's Already

Locking Advice

If you haven’t taken advantage of locking, you may as well float, today, to see how the market plays out.  Knowing when to lock is key to financial security when purchasing a home.  I have some of the lowest interest rates on the planet, with over 65 banks to choose from, including Access Real Estate Lending’s own Bank with plenty of lenders in my warehouse line.  Call me for sound real estate financing advice.  Have a great weekend!

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