Danny Salas

Chico, CA Interest Rates Market Report – Economic Influences – December 11, 2009

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Chico, CA Interest Rates Market Report – Economic Influences – November 13, 2009

Happy Friday the 13th!

Bonds are actually trading at a signicant level.  They’re currently at the high’s of October and May.  So, another opportune time to take advantage of the market!

Consumer Sentiment

Consumer Sentiment was reported at 66, lower than the 71 mark that economists were looking for.  I’ve been writing about how the media has been hyping up the employment numbers as good signs of a recovery, however, it looks as though most consumers are taking a similar opinion as mine.

$1 Trillion Auctioned So Far

About $14 Billion in Treasuries were auctioned off this week.  Compared to past months of about $25 Billion is auctions, you can see that the number is dwindling.  As this number declines, rates will eventually move up!

Next Week…

That’s about it on the interest rate front this morning.  Next week is loaded with economic data, so pay close attention!  Have an excellent weekend!

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Chico, CA Interest Rates Market Report – Economic Influences – October 16, 2009

Interest Rates Benefiting At The Expense Of Stocks

We Have Support

The 50-Day Moving average has acted as a huge layer of support, since August.  True to form, today, Mortgage-Backed Securities Bounced right off of that trend line and is patiently sitting right above it.

Stocks Now Down

With Bank of America reporting its 1st loss of the year, Stocks are taking the hit.  General Electric and IBM also reported less than attractive earnings.  With money pouring out of Stocks, generally, those investors find a safe haven in bonds, and therefore, Mortgage-Backed Securities.  The higher the bond value, the lower the yield.  The lower the yield, the lower the interest rate.

Conflicting Growth Figures

Industrial Production and Capacity Utilization were reported somewhat higher than expectations.  This pressure on the economy is good, however, bad for interest rates.  But don’t panic.  We’re still well below inflationary readings on these reports.

Consumer Sentiment is lower than expectations.  This is showing that consumers are more interested in saving and paying down debt, than spending.  Not so good for the economy, but good for interest rates.  The consumer thinks that unemployment has hit its bottom.  I’m not so sure.  I don’t think our struggle is over yet.  We’ll have to wait and see…

Locking In…

Well, I’d float today.  We have the support of the 50-Day Moving Average and Stocks aren’t liking the 3rd Quarter Earnings Reports that keep coming out…so we’ll watch these levels, carefully!

You Say It’s Your Birthday…

Tomorrow’s my birthday.  I will have lived forty-two years on this planet, and I must say, they’ve been good to me.  I am spending the weekend with my family and some close friends.  I hope your weekend is as enjoyable as I expect mine to be.  As Brian Phelps says (Mark & Brian), “Be good humans!”  Until next week…

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Chico, CA Interest Rates Market Report – Economic Influences – September 25, 2009

Probably A Good Day To Lock

Here’s what we’re looking at, today.  We have managed to climb above the 200-Day Moving Average.  This is good for interest rates.  I do think, however, that to get any better, would prove difficult.  There are two levels, just above our current level of pricing, that kind of act like a signal to the markets.  What I mean is once we hit a certain level of pricing, investors see that level and realize that it might be a good time to cash in on their investment.  Just like stocks, when it reaches a certain price, there is always a good time to sell.  That’s what I see here.

Signs Of A Not So Good Recovery

Durable Goods Orders, for August, well…sucked.  Much worse than expectations at a 2.4% loss, when they estimated a 0.4% gain.  When stripping out transportation, they were unchanged, however, they expected a 0.1% increase.  Durable Goods Orders are household items that the consumer is expected to hold onto for more than three years.  Dishwashers, television sets, etc.  This is an important figure because, as we’ve been reading, things have been looking fairly rosy, however, this report shows that possibly, businesses have been re-ordering items recently, because they haven’t this past year, because of the recession.  So, are they just re-stalking their shelves becasue they’re out of supplies?  Hmm?

Another Sign Of Higher Rates

This is very important to talk with your buyers about.  Or, Buyers…this is why it’s so important to start being very serious about buying now.  I expect rates to be O.K. through the rest of the year.  However, they will start to climb, into 2010, maybe a little sooner.  The New York Federal Reserve purchased about $23 Billion of Mortgage-Backed Securities this week.  Of interest…they bought at around the 5.5% Coupon (Rate).  So, when those rates “hit the street,” so to speak, to the consumer, there is a cost.  To service the loan, to pool it or bundle it up for sale to Fannie Mae or Freddie Mac, even Wall Street wants a piece of the action.  That cost is approxmiately .75% on top of the 5.5%.  So, when those funds are sold “on the street,” the rate equates to 6.25%.  Hence, higher rates!

Other Economic Stuff

Consumer Sentiment was higher than expected.  This may come down after third quarter earnings reports are realeased from corporations.  I’ve been talking about this, and its effects on intrest rates, in other articles.  New Homes Sales were lower than expected.  Interestly enough, homes only sat an average of 7.3 months, on the market, as opposed to 7.5 months, last month.  This is the best reading since January of 2007.  Good news for housing, however, is it the tax credit, or the lack of construction, causing this?  We’ll have to wait and see

Locking In

So, the graph shows a sliding down of rates, however, I think we have an opportunity here.  Once we get into October, things may change, a little, but I like today’s feeling.  See ya next week!