Danny Salas

Chico, CA Interest Rates Market Report – Economic Influences – September 22, 2009

Rates are Bouncing Back & Forth

Fed Statement Nervousness

Mortgage-Backed Securities are bouncing back and forth between the floor of support, at the 25-Day Moving Average, and the ceiling of resistance, at the 200-Day Moving Average.  Today’s nervousness has to do with an auction of $43 Billion of 2-Year Notes.  While these auctions have fared well, as of late, with the Fed meeting yesterday and today, and publically speaking tomorrow…investors may be hesitant to purchase bonds until they know a little more about what the Fed’s position on the economy is. 

Signs Of The Recession Turning

The private Conference Board reported their Index of Leading Economic Indicators was up for the fifth month in a row.  This is the first steady increase of this index since March of 2009.  Interestingly enough, this indicator has been accurate in all recessions since 1960.  So, if history sets a precedent, we are, currently, at the bottom of the recession. 

Housing Prices

The Federal Housing Finance Agency released their “Housing Price Index” for July.  The bad news was the housing prices, nationally, had declined by 4.2%, however, the good news is that housing prices actually increased 0.3% from June to July.  This supports Warren Buffet and Ben Bernanke’s Statements made this past month, that we’re moving out of the housing slump and out of the recession.

Why Buy Now

Rates are at historic lows.  Home buyers will wish that they would have acted now, before the Government runs out of its purchasing power of Mortgage Backed Securities.  The Fed has purchased $870 Billion of the $1.25 Trillion it has promised to the program.  Not to mention that the program is scheduled to end at the end of this year.  When that purchasing power is gone, rates will go up.  So, tell your friends, clients, buyers, refinance opportunities, to make their move…and soon.

Locking Advice

We’re in a float mode, however, again, watching the market very delicately.

Chico, CA Interest Rates Market Report – Economic Influences – September 18, 2009

Probably A Good Day To Lock

Ben Bernanke Bobble-Heads

That’s right!  I’m mass producing and selling them for only $11.50 per bobble head!  Just touch his head and the “up, down, up down” movment is an indicator of where interest rates are…up, down, up, down.  Order forms hidden in “Industry Updates.”  Keep Looking!

Where The Market Is Headed

So, we bounced off of the 25-Day Moving Average, and we keep toying with the 200-Day Moving Average.  As I write this, we’re sitting above that 200-Day trend line, but Stocks are up, and that scares me.  Generally, when Stocks are up, Bonds are down…and when Bonds are down, rates move up!  I might consider locking, here!  Another concern is that it’s Quadruple Witching Day, and Rosh Hashanah.  That may mean a light day of trading for certain parts of the world. 

$8,000 Tax Credit or $15,000 Tax Credit?

White House Spokesman Robert Gibbs, announced this morning that government officials are considering either extending the $8,000 Tax Credit, or even increasing that amount to $15,000 for qualified First Time Home Buyers.  There is legislation in the House and Senate, AND there’s talk of removing the income limit restrictions.  It’s just talk, right now, but this may be a huge opportunity for some.  Keep your mouse posted on this blog for more information.

Chico, CA Interest Rates Market Report – Economic Influences – September 10, 2009

We've made it past the 200-Day Moving Average

Intial Jobless Claims Around Expectations

So, 550,000 new claims occured this week.  They expected 560,000, so it was better than expected, but still pretty terrible.  The number of continuing claims moved down to 6.09 Million people.  Moving down, you’d think, would be good…however, how many people are just losing their benefits because they’ve been receiving unemployment compensation for too long, and therefore, not eligible any more…I think a lot!

Treasury Note Auction

The verdict is in!  The Auctions went well, again.  AND, foreign appetite for our Treasuries were relatively favorable, as well!  The United States’ yields are a bit higher than the rest of the world, right now, so foreign investment fared well.  But, once other countries start to increase their yields, we’ll need to watch closely and see if that will effect our yields, and therefore interest rates, in the near or distant future. 

Where Yields Are

So, we’ve beaten the 200-Day Moving Average and that has become a nice level of support for interest rates.  Expect to see rates in the range of 4.75%* to 5.0%** if we can stay at current levels.  Going into Friday, things may change a little before the weekend, but the closer to October…rates should be around 4.75%…we’ll see…

*= APR 4.965%

**=APR 5.219%