Good Morning
Everyone-
We have 19 days left to the
Fiscal Cliff and 10 days left to the end of the world (based on the Mayan
calendar). Assuming we make it through the end of the world, then the Fiscal
Cliff will have to be dealt with.
In the next few weeks, if a deal
is struck, please expect our market to rally. Some experts feel we could see a
1000 point rally on the DOW, others feel if a deal is reached, we might see one
or two days of a rally and then we will return to business as usual. No matter
what happens though, when a deal is reached our mortgage rates will go up. So
make sure you are watching the TV business channels everyday. A deal can happen
at anytime as negotiations typically go through the night.
On Friday of last week we had
the Non Farm Payrolls released. This number came in about 40K better than
expected and the unemployment rate came down to 7.7% which caused our interest
rates to open up higher on Friday. However, after the initial sell off in
Mortgage Bonds we gained half of it back before the market even opened. The
main reason is that the previous months jobs number was revised higher by 45K.
So when we received the October jobs number in November, it was adjusted
higher by 45k (30%). That's why when data is released we see movement but it
takes time for the market to "digest" everything as typically numbers
are revised 3 to 4 times before they are finalized. The only reason why the
unemployment rate fell is many Americans are falling out of the unemployment
survey (by not getting unemployment benefits anymore), or taking early
retirement.
Also what is going on is the
FOMC (Federal Open Market Committee) meeting ends today. These meetings happen
8 times a year were short term interest rate policy and bond purchases are
discussed. Ben Bernanke will be speaking around 11:30 our time. What is
expected that he will say is another round of bond buying will be announced as
the last round, called Operation Twist, will be ending. We might see a relative
flat market until he makes his announcement. At this meeting here, they will
also decide whether to raise prime. Prime is expected to stay put until late
2014.
One more item on the Cliff, if
we do go over it, the average tax hike on the American household is said to be
around $3500. So that is $3500 less of disposable income or income to pay bills
and live on depending on the health of that household. The only positives that
could possibly come with going over the cliff is lower rates and it is forcing
our government to cut spending and get closer to balancing our budget.
So what to take from all of
this, is that the market is going to get choppy. We will not see the stability
in our rates until we have more certainty about the Fiscal Cliff.
Be aware of your market, educate
your clients and let's close some deals
Josh
Wednesday, December 12, 2012
Friday, November 30, 2012
Market Update 11-30-12
Good Afternoon All-
What a crazy month we had. Sandy, Obama, "Cliff", it never ends.
We have seen our rates, post Sandy, come down about .125%. Now the big debate we have going on is the Fiscal Cliff. Be aware of what the outcome will be when we have clear direction from our government. For example, if we go over the cliff, our interest rates will get much lower. There will be job loss, and panic which will cause money to flood the bond markets, raising prices of bonds, thus lowering interest rates. If we strike a deal, which most likely we will, rates will move higher, and the stock market will in turn rally. We have 31 days until this date so, as usual, plan on everything going down to the wire as we know our politicians will be going back and forth.
One item that it is very important that you need to be aware of is that Fannie Mae and Freddie Mac have just imposed some higher fees (guaranty fees) for purchasing loans. This becomes effective December 1st. They have increased their fees 10 basis points. What this means is all companies who sell loans to Fannie and Freddie will be making 10 basis points less. After doing some research on this, it appears that many of the larger banks have already anticipated this and have preemptively planned for this. However, what we can gain from this is many of the brokers and correspondent lenders will suffer. We might see their rates increase a little bit to account for this which bodes well for us. As we know all increases in goods are passed off to the consumer. In a multi-trillion dollar mortgage industry, this increase will give fannie and freddie hundreds of billions of more revenue.
The economic data we have had released recently has been average at best. Inflation has been tame, jobless claims are in-line, retail sales are so-so, GDP is hovering around 2%. These are all signs of a sluggish and stagnant economy.
Our interest rates will probably remain at this level for the upcoming months however we will get a pop either way when a decision is made for the fiscal cliff.
Be aware of your market, educate your clients and let's close some deals.
Josh
What a crazy month we had. Sandy, Obama, "Cliff", it never ends.
We have seen our rates, post Sandy, come down about .125%. Now the big debate we have going on is the Fiscal Cliff. Be aware of what the outcome will be when we have clear direction from our government. For example, if we go over the cliff, our interest rates will get much lower. There will be job loss, and panic which will cause money to flood the bond markets, raising prices of bonds, thus lowering interest rates. If we strike a deal, which most likely we will, rates will move higher, and the stock market will in turn rally. We have 31 days until this date so, as usual, plan on everything going down to the wire as we know our politicians will be going back and forth.
One item that it is very important that you need to be aware of is that Fannie Mae and Freddie Mac have just imposed some higher fees (guaranty fees) for purchasing loans. This becomes effective December 1st. They have increased their fees 10 basis points. What this means is all companies who sell loans to Fannie and Freddie will be making 10 basis points less. After doing some research on this, it appears that many of the larger banks have already anticipated this and have preemptively planned for this. However, what we can gain from this is many of the brokers and correspondent lenders will suffer. We might see their rates increase a little bit to account for this which bodes well for us. As we know all increases in goods are passed off to the consumer. In a multi-trillion dollar mortgage industry, this increase will give fannie and freddie hundreds of billions of more revenue.
The economic data we have had released recently has been average at best. Inflation has been tame, jobless claims are in-line, retail sales are so-so, GDP is hovering around 2%. These are all signs of a sluggish and stagnant economy.
Our interest rates will probably remain at this level for the upcoming months however we will get a pop either way when a decision is made for the fiscal cliff.
Be aware of your market, educate your clients and let's close some deals.
Josh
Friday, November 9, 2012
Market Update 11-9-2012
Good Morning Everyone-
And the winner is......Lower Mortgage Rates.
We have had a busy couple of weeks. My last update I sent on Halloween. As stated in that update, Sandy has bode well for our interest rates. Devastation is not something we seek out, but when it does happen it helps the bond market. It is estimated that it has/will cost the US economy close to 20 billion. United Airlines alone reported that Sandy has cost the company close to 90 million with cancelled flights and lost revenue.
The other main event that we just had was our presidential election. Whether you agree with the outcome or not, the general rule of thumb was that if Romney won the stock market would have rallied which would have increased interest rates, and if Obama won the market would sell off and which would lower interest rates. Well we obviously know that Obama won and with him winning as well as Sandy, we have seen our rates decrease over the past week. Rule of thumb again is when stocks do well, rates move higher, when stocks sell off, rates become lower.
The one main event that the news will not stop talking about and that I touched on in the 10-31 update, is the Fiscal Cliff. Remember the "cliff" is a set of tax hikes and cuts that are set to take affect. The drop dead date for these changes is January 2nd. This will be running our market for the next few months. Basically if these tax hikes do take affect, it is perceived that business development, hiring, and job creation will be halted and we will be pushed into another recession. There is some truth to this belief. Also the "cliff" has layoffs for government workers, cutting of school spending and infrastructure built into the cuts/hikes. The next few months our politicians will be battling. With a president that is adamant on raising taxes on the wealthy, and business, we know politicians will be vocal. Remember were politicians get most of there campaign money.
We had some huge news this morning with Q3 earnings from JC Penny which had a 93 cents a share loss with sales lower by 26% under expectations. They are one of the largest retailers and going into our Holiday season with retail sales lower, this is not a good sign. Retailers are expected to hire 100 to 150K of seasonal employees. So in order to keep the economy moving, we need good retail sales.
Jobs and extending the tax cuts will be the number one discussion and with this, we hope to avoid the cliff. Obama will even be speaking about this today. The economy is fragile and with the baby boomers retiring in masses, pulling pensions and social security, jobs need to be created to help pay for this and cliff needs to be avoided.
Mortgage Interest rates will open lower (better) today so please take advantage of the analysis and educate your clients.
I personally do not feel that rates can get much lower but we will see a little more improvement in rates until we hit a wall.
Be aware of your market, educate your clients and let's close some deals.
Josh
Wednesday, October 31, 2012
Market Update 10-31-2012
Good Afternoon All-
Happy Halloween!
We have seen a crazy few days. We have had one name that has been resonating in our ears.....SANDY. Hurricane Sandy has devastated many areas of the east coasts. For the first time since 1888 our stock market was closed for 2 consecutive days. The damage that Sandy has caused is estimated at over 20 billion and growing. Today the markets are open but they are running on a "skeleton crew" which means the volume is very light w. Volatility will be rampant.
So how does this affect our mortgage world?
Understand that these catastrophic events, although they result in carnage and death, they pose to be very good for interest rates. Investors tend to move away from stocks and push money into bonds thus lowering rates. Remember what happened March 11th, 2011 when the Tsunami hit Japan? We saw a decrease in our rates of about .250% in a week. This disaster might very well have that effect as the days and weeks go on. Insurance funds will have to unload there equity positions to raise cash to pay for all of this damage. We should see stocks moving lower and bond prices pushing higher.
Due to the markets being closed all of our economic data has been delayed. So we have an interesting few days ahead.
We have consumer confidence reports, income reports, manufacturing surveys, etc . Then on Friday (the first friday of every month) we have the Non-Farm Payrolls and the Unemployment Rate. So tomorrow and Friday will be very choppy. None of these recent events will be taken into account for Friday's numbers. Based on the mediocre earnings we have been seeing the numbers shouldn't be anything to write home about but you never know.
Nov 6th will be a huge day (election day) and expect some major movement on Nov 7th following the results.
Remember volatility is the new normal in our lives. Expect nothing less.
Be aware of your market, educate your clients and let's close some deals.
Josh
Monday, October 29, 2012
Stock Markets Closed
Breaking News: Stock Markets will be closed today due to Hurricane Sandy. This is the first closure since 1987. This storm could cost up to 20 billion in damage according to CNBC . If any of the east coast oil refineries are hit, gas will go up.
Per last week's post, originators need to take advantage of the recent lowering of rates. Tomorrow should be lower as well with the hurricane going on.
Josh
Per last week's post, originators need to take advantage of the recent lowering of rates. Tomorrow should be lower as well with the hurricane going on.
Josh
Friday, October 26, 2012
Market Update 10-26-12
Good Morning All-
We have had a busy few weeks with our market. We had our rates at an all time low and now we have seen them creep up around .375% over the past 3 weeks. As I stated before (9-27 update), rates fundamentally could not get lower at that point. There was too much resistance. That proved to be correct.
We need to understand that the main entity purchasing Mortgage Backed Securities (the investments that mortgage rates are based off of) is the Fed. That's it. Many of the bond funds who used to buy MBS's, have unloaded their positions because they know they have a guaranteed buyer waiting in the wings. So it will be harder and harder to for rates to be pushed lower.
If you have those clients waiting around for lower rates, be sure to educate them on what is really happening in our market. Do not let them get caught in the media hype about "low rates" as greed can backfire.
I do truly feel that we will see rates come down a little bit (.125% or so) over the next week. The main reason is corporate earnings. Right now we are in the midst of Earnings Season. This is when all corporations release their 3rd quarter earnings. Many of them have been lack luster. With earnings there is an estimate that the street has (the market) and then based on were the actual numbers come in, we will see movement. Many companies have been missing earnings and the most recent and one of the most powerful.....Apple.
So with this plethora of missed earnings, it shows that our economy is weak, and still very fragile.
Plus we have something coming up which we need to consider.....the Fiscal Cliff. The fiscal cliff is rapidly approaching. Now what this is is a bunch of tax increases that are set to take affect at the end of 2012. Raising taxes in a fragile economy can have dire consequences. However, if we do hit this "cliff" expect rates to improve drastically. So be aware as we are only about 45 days away from the cliff. Expect there to be no real talk about this until Nov......7 one day after our presidential election. Then our government will get back to business dealing with the issues at hand.
Lastly, we just had some economic data that just hit the wires a few minutes ago. We had Q3 GDP (gross domestic product). The market estimated that we would have a 1.8% growth. The actual number came in at 2%. On the surface, that number looks good, however when the number is dissected, this is were issues arise. The Business growth portion of this number is actually negative and the personal consumption portion (what we buy and consume) was flat. Understand there will be 3 more readings of Q3 GDP. Above I talked about corporate earnings, however not all companies have released their earnings. So basically, the government estimates roughly a third of this Q3 GDP number. The final reading for Q3 GDP will not be in for another month. To really sustain growth and put an end to our recession, we need around 3% growth overall. We have a lot to go.
So what to take away from this is mortgage rates should open up better today. My feeling is that we should see an improvement in rates over the next week, but as we know volatility is the new normal.
Be aware of your market, educate your clients and let's close some deals.
Josh
We have had a busy few weeks with our market. We had our rates at an all time low and now we have seen them creep up around .375% over the past 3 weeks. As I stated before (9-27 update), rates fundamentally could not get lower at that point. There was too much resistance. That proved to be correct.
We need to understand that the main entity purchasing Mortgage Backed Securities (the investments that mortgage rates are based off of) is the Fed. That's it. Many of the bond funds who used to buy MBS's, have unloaded their positions because they know they have a guaranteed buyer waiting in the wings. So it will be harder and harder to for rates to be pushed lower.
If you have those clients waiting around for lower rates, be sure to educate them on what is really happening in our market. Do not let them get caught in the media hype about "low rates" as greed can backfire.
I do truly feel that we will see rates come down a little bit (.125% or so) over the next week. The main reason is corporate earnings. Right now we are in the midst of Earnings Season. This is when all corporations release their 3rd quarter earnings. Many of them have been lack luster. With earnings there is an estimate that the street has (the market) and then based on were the actual numbers come in, we will see movement. Many companies have been missing earnings and the most recent and one of the most powerful.....Apple.
So with this plethora of missed earnings, it shows that our economy is weak, and still very fragile.
Plus we have something coming up which we need to consider.....the Fiscal Cliff. The fiscal cliff is rapidly approaching. Now what this is is a bunch of tax increases that are set to take affect at the end of 2012. Raising taxes in a fragile economy can have dire consequences. However, if we do hit this "cliff" expect rates to improve drastically. So be aware as we are only about 45 days away from the cliff. Expect there to be no real talk about this until Nov......7 one day after our presidential election. Then our government will get back to business dealing with the issues at hand.
Lastly, we just had some economic data that just hit the wires a few minutes ago. We had Q3 GDP (gross domestic product). The market estimated that we would have a 1.8% growth. The actual number came in at 2%. On the surface, that number looks good, however when the number is dissected, this is were issues arise. The Business growth portion of this number is actually negative and the personal consumption portion (what we buy and consume) was flat. Understand there will be 3 more readings of Q3 GDP. Above I talked about corporate earnings, however not all companies have released their earnings. So basically, the government estimates roughly a third of this Q3 GDP number. The final reading for Q3 GDP will not be in for another month. To really sustain growth and put an end to our recession, we need around 3% growth overall. We have a lot to go.
So what to take away from this is mortgage rates should open up better today. My feeling is that we should see an improvement in rates over the next week, but as we know volatility is the new normal.
Be aware of your market, educate your clients and let's close some deals.
Josh
Thursday, September 27, 2012
Market Update 9-27-12
Good Morning All-
I think it is appropriate to say, How Low Will Rate's Go?
Honestly, probably not much lower. So what is going on right now and why are the rates so low?
When the Fed rolled out QE3 (Quantitative Easing 3) there number one goal was to purchase 60 billion a month in Mortgage Bonds to help push rates lower and lower. Basically look at it from sheer supply and demand. What happened in 2005 with the housing market? The more demand there was for houses, the higher the prices went. Right now the only demand is the Fed. They are the one's pushing prices higher and higher, thus pushing yields (rates) lower and lower. What's going to happen though? Like the housing market, many of us have learned over the past 7 years. If the price is right...many of us would sell in a heartbeat. When prices get high enough on these Mortgage Bonds, you will see many of the pension funds, bond funds (who normally buy mortgage bonds), etc, unload their mortgage bonds that they bought months ago for a nice profit. These funds know that the Fed is the buyer. So what you will see is it will get harder and harder for rates to move lower. If it is not worth it for these funds to buy mortgage bonds, then the only buyer left is the Fed. Look at it from your point of view. Would you buy a 30 year Bond for 3% return on your money?
What we have in our favor though that might help keep rates low and keep these Funds buying mortgage bonds along with the Fed is Europe, especially Spain. Spain's 10 year T-Bill is hovering around 6.75%. Our 10 year is around 1.60%. Spain has around 25% unemployment in some areas, and is on the verge of falling off the fiscal cliff. So as long as Europe is having these issues (and they will for years to come) it will keep investors jittery about the all around health of the economy thus keeping money in the bond market and rates should stay low.
We had some economic data that came out yesterday. We had new home sales released for August. Estimates were 380k and the actual number came in at 373K. This number is a little lack luster.
We just had some new economic data come out. First we had the Initial Jobless Claims. These are people receiving first time unemployment benefits. Estimates were 380K and the actual number is 359K. For us to really start having a better jobs situation we really need to bring this number down to around 325K.
Next we had the durable goods order. Durable good orders estimates were -5.1% and the actual number was -13.2%. This terrible number was attributed to a lousy month in Auto sales and Boeing Airplanes. Boeing had orders to build 100 planes last month, but it was cancelled to just 1 plane order. Also Defense spending was down 40% last month as well as the Afghanistan war is starting wind down. That had a huge effect on this durable goods number.
Lastly, we had the final reading for quarter 2 GDP (gross domestic product). The estimates were 1.7% and the actual reading came in at 1.3%. This means that our economy is not growing. We need around 2.5% to 3.0% on average to stimulate growth.
So what to take away is that all this economic news is lousy. Even with all this bad news, rates will open up worse today due to profit taking of bond funds and people capitalizing on the recent huge run up we have had in rates. As long as the economic data stays like this, rates are not going to shoot up. We will see volatility though and it will be harder and harder for the Fed's to keep rates low.
As I finish up...this just in, The US postal service is expected to default on a 5.6 billion payment that is due this weekend for retirees, and employee costs. The average loss for the post office is 25 million a day. What a great business model. So expect stamps to be going up very soon.
Be aware of your market, educate your clients and let's close some deals.
Josh
I think it is appropriate to say, How Low Will Rate's Go?
Honestly, probably not much lower. So what is going on right now and why are the rates so low?
When the Fed rolled out QE3 (Quantitative Easing 3) there number one goal was to purchase 60 billion a month in Mortgage Bonds to help push rates lower and lower. Basically look at it from sheer supply and demand. What happened in 2005 with the housing market? The more demand there was for houses, the higher the prices went. Right now the only demand is the Fed. They are the one's pushing prices higher and higher, thus pushing yields (rates) lower and lower. What's going to happen though? Like the housing market, many of us have learned over the past 7 years. If the price is right...many of us would sell in a heartbeat. When prices get high enough on these Mortgage Bonds, you will see many of the pension funds, bond funds (who normally buy mortgage bonds), etc, unload their mortgage bonds that they bought months ago for a nice profit. These funds know that the Fed is the buyer. So what you will see is it will get harder and harder for rates to move lower. If it is not worth it for these funds to buy mortgage bonds, then the only buyer left is the Fed. Look at it from your point of view. Would you buy a 30 year Bond for 3% return on your money?
What we have in our favor though that might help keep rates low and keep these Funds buying mortgage bonds along with the Fed is Europe, especially Spain. Spain's 10 year T-Bill is hovering around 6.75%. Our 10 year is around 1.60%. Spain has around 25% unemployment in some areas, and is on the verge of falling off the fiscal cliff. So as long as Europe is having these issues (and they will for years to come) it will keep investors jittery about the all around health of the economy thus keeping money in the bond market and rates should stay low.
We had some economic data that came out yesterday. We had new home sales released for August. Estimates were 380k and the actual number came in at 373K. This number is a little lack luster.
We just had some new economic data come out. First we had the Initial Jobless Claims. These are people receiving first time unemployment benefits. Estimates were 380K and the actual number is 359K. For us to really start having a better jobs situation we really need to bring this number down to around 325K.
Next we had the durable goods order. Durable good orders estimates were -5.1% and the actual number was -13.2%. This terrible number was attributed to a lousy month in Auto sales and Boeing Airplanes. Boeing had orders to build 100 planes last month, but it was cancelled to just 1 plane order. Also Defense spending was down 40% last month as well as the Afghanistan war is starting wind down. That had a huge effect on this durable goods number.
Lastly, we had the final reading for quarter 2 GDP (gross domestic product). The estimates were 1.7% and the actual reading came in at 1.3%. This means that our economy is not growing. We need around 2.5% to 3.0% on average to stimulate growth.
So what to take away is that all this economic news is lousy. Even with all this bad news, rates will open up worse today due to profit taking of bond funds and people capitalizing on the recent huge run up we have had in rates. As long as the economic data stays like this, rates are not going to shoot up. We will see volatility though and it will be harder and harder for the Fed's to keep rates low.
As I finish up...this just in, The US postal service is expected to default on a 5.6 billion payment that is due this weekend for retirees, and employee costs. The average loss for the post office is 25 million a day. What a great business model. So expect stamps to be going up very soon.
Be aware of your market, educate your clients and let's close some deals.
Josh
Friday, September 7, 2012
Market Update 9-7-12
Good Morning All-
We had some major economic news come out in the past 2 days. A lot of job information was released and as you know jobs is the number one thing that everyone is talking about.
Yesterday, we had the ADP Private employment report. For those of you who do not know what ADP is, look as some of the paystubs your clients have. Odds are in the upper right hand corner it says "ADP." This is a corporation who handles payroll checks for thousands of companies. So a few years back, they came up with the ADP employment report and who better to report employment than the company that handles most of our checks.
Remember when numbers come out the market has an estimate, and based on were the actual number comes in, we get movement. Now ADP only measures private employment and they also do not account for all jobs out there. The market estimated that there were 143,000 jobs created. The actual ADP report came in at about 201,000 jobs. The markets loved this move. That is why we saw the DOW gain almost 250 points yesterday. Our mortgage bonds (what our rates are based off of) lost almost 50 basis points. In our world that is .375 price or maybe .125% in rate. Our rate sheets reflected about that.
Today is known as Jobs Friday. The first Friday of every month reports major economic jobs data. It's like the Superbowl for finance every month. Once a month we have the government jobs number come out which takes all jobs both public and private into it's readings except farm jobs. In the height of the crisis this number was negative. We were shedding about 700K a month for a few months. Over the year and a half, this number has begun to move positive.
Today we had the Jobs Number (also known as the Non Farm Payrolls) come out. The market estimated 130K new jobs were created and in actuality there was only 90K in new jobs created. Now in itself that does not seem awful, but we really need around 175K in new jobs being created to grow. Plus the previous month's number was revised down. Last month the government released info that stated that 163K new jobs were created and now they lowered that number by 23K. So that made the jobs outlook even poorer.
Next we had the Unemployment Rate come out. The market estimated 8.3% unemployed, and the actual number came in at 8.1%. So how did the rate go down, when the jobs number was terrible? Easy, people stopped looking for a job, thus fell out of the survey, or many of the seasonal jobs (our college kids) left their jobs and went back to school. They are technically not unemployed as school is considered employment.
So with this huge amount of info, stocks went from positive to negative and our mortgage bonds went from -30bps this morning to +70bps. That is a 100 basis point move. Our rates should open up about .125% to a .250% in rate today.
It is never a good idea to gamble on a day like today but let's all use this much better pricing going into the weekend so we can procure more business. Putting all the hardships we endure on a daily basis aside, rates will improve on our rate sheets today.
Educate your clients, be aware of the market, and let's close some deals.
Josh
We had some major economic news come out in the past 2 days. A lot of job information was released and as you know jobs is the number one thing that everyone is talking about.
Yesterday, we had the ADP Private employment report. For those of you who do not know what ADP is, look as some of the paystubs your clients have. Odds are in the upper right hand corner it says "ADP." This is a corporation who handles payroll checks for thousands of companies. So a few years back, they came up with the ADP employment report and who better to report employment than the company that handles most of our checks.
Remember when numbers come out the market has an estimate, and based on were the actual number comes in, we get movement. Now ADP only measures private employment and they also do not account for all jobs out there. The market estimated that there were 143,000 jobs created. The actual ADP report came in at about 201,000 jobs. The markets loved this move. That is why we saw the DOW gain almost 250 points yesterday. Our mortgage bonds (what our rates are based off of) lost almost 50 basis points. In our world that is .375 price or maybe .125% in rate. Our rate sheets reflected about that.
Today is known as Jobs Friday. The first Friday of every month reports major economic jobs data. It's like the Superbowl for finance every month. Once a month we have the government jobs number come out which takes all jobs both public and private into it's readings except farm jobs. In the height of the crisis this number was negative. We were shedding about 700K a month for a few months. Over the year and a half, this number has begun to move positive.
Today we had the Jobs Number (also known as the Non Farm Payrolls) come out. The market estimated 130K new jobs were created and in actuality there was only 90K in new jobs created. Now in itself that does not seem awful, but we really need around 175K in new jobs being created to grow. Plus the previous month's number was revised down. Last month the government released info that stated that 163K new jobs were created and now they lowered that number by 23K. So that made the jobs outlook even poorer.
Next we had the Unemployment Rate come out. The market estimated 8.3% unemployed, and the actual number came in at 8.1%. So how did the rate go down, when the jobs number was terrible? Easy, people stopped looking for a job, thus fell out of the survey, or many of the seasonal jobs (our college kids) left their jobs and went back to school. They are technically not unemployed as school is considered employment.
So with this huge amount of info, stocks went from positive to negative and our mortgage bonds went from -30bps this morning to +70bps. That is a 100 basis point move. Our rates should open up about .125% to a .250% in rate today.
It is never a good idea to gamble on a day like today but let's all use this much better pricing going into the weekend so we can procure more business. Putting all the hardships we endure on a daily basis aside, rates will improve on our rate sheets today.
Educate your clients, be aware of the market, and let's close some deals.
Josh
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