Austin Mortgage Blog

Posts Tagged ‘austin mortgage pricing’

Today’s “big deal” will be the results of European bank stress tests

Today’s “big deal” will be the results of European bank stress tests, due out at 11:00 am cst.  Street talk has it that the tests will show a couple of Spanish banks failed portions of the test.  Others are rumored to have done ok.  This will be a market mover so stay tuned.  If the tests are better than expected, we’ll see stocks rally and bonds/Austin mortgage pricing get pinched.  Worse than expected results will produce the opposite reaction.  Volatility has already been huge this morning as we’ve seen current coupon mortgage backs trade in a 10/32’s range.  Currently, the 10 year note is off 6/32’s, mortgage backs off 3/32’s, and stocks plus 30 something on the big board.  Our tactical bias is neutral/defensive as the top of the range has been good resistance (best pricing), with the next move being consolidation, trading back to the bottom of the range.  Keep in mind this could all change given the stress test results out in a little over an hour.  Long term this is still a low Austin mortgage interest rate environment until housing and employment boot strap themselves back to life.  We’ll give you the skinny once the tea and biscuits crowd gives us a jolly good!

After a early morning rally due to stocks falling into the abyss, both stocks and bonds are reversing course

After a early morning rally due to stocks falling into the abyss, both stocks and bonds are reversing course.  The stock slide was the result of earnings and lack of top line revenues by the likes of J & J and Goldman Sachs.  IBM posted the same type of results, hitting bottom line earnings but with a negative revenue bias going forward.

At the open, the Dow fell 150 plus while the 10 year note and mortgage backs jumped 5 to 7/32’s.  As we speak, the 10 year note is plus 6/32’s, mortgage backs up 2/32’s, and the Dow off only 50 something.  With most markets being in a period of high volatility, anything can happen.  That’s why I’ll cut this short and tell you that the market is 1 to 2/32’s away from a worsening Austin mortgage price change.  Be careful out there.

Today we see a continuation of Wednesday’s improving bond prices

Today we see a continuation of Wednesday’s improving bond prices.  Yesterday the 10 year improved in price, and this morning we have an additional 22/32s improvement.  The 10 year yield stands at 2.97, not a bad rally.  Austin mortgage pricing followed this trend, with a combined two day price improvement.   This move was spurred by a combination of factors including weak retail sales, a decent treasury auction, FOMC minutes that show downgraded revisions in growth, and this morning’s PPI number.  PPI can in at -0.5%, and the core rate, for those that don’t eat or drive, came in at +0.1%.   Tomorrow we have a few economic numbers coming out, including CPI.

Stocks just can’t catch a break, slip slidding once again into negative territory

Stocks just can’t catch a break, slip slidding once again into negative territory.  Bonds, notes, and Austin mortgage pricing are the benefactors, continuing to push to lower yields.  The 10 year note is plus 20/32’s, trading at a yield of 3.17%.  Stocks are off 100 plus on the big board.  Also, we have broken out of the triangle pattern to the upside (bullish).  Need to close at current level or better and maintain into tomorrow’s trade.  Easier said than done with auctions and the FOMC on tap for tomorrow.  Meanwhile, Austin borrowers are encouraged to take advantage of the great Austin mortgage rates currently available.

Expect Austin mortgage rates to stay low for some time to come

Just when you thought the economy was doing a little better……. someone throws cold water on it. The chill came via Weekly Unemployment Claims which jumped 12K to 472K. The higher than expected claims number was largely the result of new filers from manufacturing, construction, and educational services.

Continuing Claims rose as well, up 88K on the week. CPI, inflation at the consumer level fell .2% with the core index up .1%. Just like PPI, nothing in the cards here to rattle the Fed. Philly Fed was also on tap, falling like a rock from 21.4 to 8. Employment indicators within the index did the damage, falling 1.7 points.

Last but not least, Leading Indicators rose .4% in May. Nothing special here as this index is widely treated as “rear view mirror” data and typically kicked to the curb. Overall, what is starting to take shape is a weakening situation in both housing and employment, coupled with falling consumer confidence. The BP mess doesn’t help either as the sickening scene from continued oil flowing does nothing for one’s psyche.

Market’s are red hot for bond bulls and woe is me for stock holders. Dow off 50 points has led the 10 year note higher by 20/32’s (yield 3.21%). Mortgage backs are plus 11/32’s, having a nice day as well. Technically, prices are nearing the best levels of the year (3.14% yield). Bulls will need to close below that level (3.13% or lower) to break out of the triangle pattern we’ve had in place since May. Daily oscillators however are bearish so overall, we do not have all time frames in harmony.

In English, it will become more and more difficult to improve Austin mortgage pricing/ lower yields without new fuel (catalyst). At the same time, the economic fundaments do not support higher Austin mortgage rates or worsening mortgage pricing. So, expect Austin mortgage rates to stay low for some time to come. Stay tuned for tomorrow.

A tug of war for Austin mortgage interest rates seems in the cards

Isn’t it funny what a trillion dollars can do for you.  Well, that’s what the European Union threw at countries such as Greece, Spain, Ireland, and Portugal in a move that mimicked what our Federal Reserve and Treasury departments did a little over a year ago.  Stocks took off in stealth fashion across the globe.  When stateside trading opened in NY, the Dow jumped 400 points at the bell.  Currently, the Dow is up 406 while the Naz is plus 102 points.  Too early to call the close which will be important.  We’ll want to see if traders are buying the bailout given passage is still needed by all 16 countries and the austerity measures (wage cuts, layoffs, retirement age rising, etc. etc.) have yet to be implemented in Greece.  They (citizens) could just be taking a rest before the street fighting once again begins.  Overall, the move has hope and removes a negative for growth round the globe.

Bonds, notes, and mortgage backs have felt the pinch but mortgage backs have held up quite nicely.  10 year note is off 33/32’s (yield 3.55%), 30 year bond is off 74/32’s (yield 4.42%), and yet MBS are down 8/32’s.  The week ahead is light on data with Retail Sales, Industrial Production, and Michigan Sentiment survey being the heavy hitters on Friday.  We will however have supply to contend with this week as the Treasury auctions 38 billion of 3 year notes tomorrow, 24 billion of 10 year notes on Wednesday, and 16 billion of the 30 year bond on Thursday.  Stock pricing and movement will hold the key to how well the paper is received.

Technically, the weakness today has taken the chart back to pre-Europe chaos levels and forced sell signals to emerge on 60 minute charts.  Daily charts however are not giving us a new bear trend.  When you have this type of divergence, the market is trying to tell us that it will take time to show it’s true colors as nothing is in harmony.  In English, this means that Austin mortgage rates and pricing can go one way or the other in short order but most likely hold steady at current levels.  Best to stay on defense as stocks certainly look better, Europe looks better, and the Federal Reserve Chairman hints of Fed Funds rate hikes sooner than later.  Personally, we like the chart (better chance of lower Austin mortgage rates/better pricing) but the fundamentals (economic data) points to a steady recovery.  A tug of war for Austin mortgage interest rates seems in the cards.

Employment report over 250K should give stocks a lift and punish our pricing for about .25 to .50. Anything less than 50K would hold Austin mortgage rates steady and probably put another whippin’ on stocks

If you happened to catch the stock market trade, you just witnessed one of historic proportions.  At one time the big board was down 990 points.  Reports and rumors are flying around with the best one being that some trader pulled a “fat finger move”, one that was to enter a sell of 1000 shares but came across as 1000000.  Hard to tell as traders are a different breed and not bashful with what they think they know.  Stocks have recovered, now down 390 on the Dow.  Who would have thought that down 390 would be a good thing.  Let’s talk about tomorrow’s Employment Report.  Street consensus goes like this;

1)      Nonfarm Payroll – Plus 200K

2)      Unemployment Rate – 9.7%

3)      Average Hourly Earnings – Plus .1

4)      Average Workweek – 34.1

Given the data we have, standard deviation mathematics, regression analytics, and the Ouija board, we’re comfortable with the 200K number or just slightly less (say 190K).  The unpredictability here comes from the weather related rebound and the number of census worker hired, both hard to handicap.  The household survey points to a much stronger number, up 264K while the ADP estimates out yesterday point to plus 32K.  That spread is big enough to drive a truck through.  Manufacturing and Construction will also be a key with expectations that both are showing signs of improvement.  Strength in the Philly Fed Survey, Empire State Survey and IMF Manufacturing data gave us that tip.  Construction jobs took a beating with the cold weather so more spring like temperatures should show a little pent up demand and hiring in the sector.  Private sector jobs look to be flat to slightly improved and temporary jobs are still increasing, albeit at a slower pace that seen in the first quarter.  So, we’ll place our bet on plus 190K Nonfarm payrolls, 9.6% unemployment rate, and Average Hourly Earnings and Average Workweek to come in on the consensus screws.  What are others saying;

1)      JP Morgan – Plus 145K and 9.7%

2)      Credit Suisse – Plus 165K and 9.6%

3)      RBS – Plus 185K and 9.7%

4)      Wells Fargo – Plus 200K and 9.7%

5)      Barclays – Plus 200K and 9.6%

Expected reaction to an as advertised report should favor stocks and bother bonds.  Reason being is that it would mark two consecutive months of job creation with a “getting better all the time” feel.  We still need to get to 250K just to break even given attrition.  Over 250K should give stocks a lift and punish our pricing for about .25 to .50.  Anything less than 50K would hold Austin mortgage rates steady and probably put another whippin’ on stocks.  With all that is moving markets these days, only the almighty know where we’ll be this time tomorrow.  Best bet for borrowers is to lock your interest rate NOW and buckle up!  Should be a wild ride.

With stochastics and moving average crosses, odds are good we’ll push to lower yields and better Austin mortgage pricing

Just when you thought issues in the Euro-zone were settling down, they don’t.  Concerns that European governments haven’t overcome the debt crisis with Greece and the rest of the PIGS has investors scrambling for cover.  Treasuries are also on the move due to an expected announcement that they will cut the size of future auctions given an improving economy and early bailout funds being repaid.  Just when you think you have a clue about the market, it reminds you that you’re clueless.

We did have a couple of pieces of economic data today.  Pending Home Sales jumped 5.3%.  Credit the 8K buyers bonus for this one.  Sales rose 13% in the South, 2% in the West, 1% in the Midwest, and fell 3.3% in the Northeast.  Factory Orders were also on the move, up 1.3% as capital equipment and petroleum drove the numbers.  The print was the largest jump in nearly two years.  Strong economic data has taken a back seat to the Greek impact on debt.  Traders are calling this “panic buying” as money and safety are joined at the hip.  Technically, 10 year note futures have broken above the regression channel that has had a lid on the market for over a month.  With futures trading at 108 06 (yield equivalent is 3.63%), the market is below the old resistance of 4.65% which points to further upside (rally) ahead.  Keep in mind that when moves happen this quickly ( 10 year up 21/32’s and 30 year up 48/32’s) that oscillators and other studies will need time to catch up.

We expect at least a pause but most likely a little consolidation from current levels before another attempt to rally can occur.  We would not like to see the market close above a yield of 3.65% as that level is now support.  With stochastics and moving average crosses, odds are good we’ll push to lower yields and better Austin mortgage pricing.  Improving economic conditions being trumped by a country one fifth the size of Texas.  Go figure.

The tactical bias for Austin mortgage rates and pricing is to remain neutral

For the most part, both fixed income and equity markets are quiet following the wild Goldman Sachs induced ride we had on Friday.  Bonds, notes, and mortgage backed securities seem to be at a crossroads, trying to handicap the ramifications of Goldman’s alleged fraud.  That alone will keep a flight to quality bid in the market.

Greece is a helper on that front as well with more uncertainty, adding 35 bps to their yield (10 year debt) and then there’s China, tapping the brakes on real estate lending.  That sent the Shanghai index down 5% in early trading.  Stateside focus is clearly Goldman but also on 1^st quarter earnings.  Citi reported before the bell, actually making a profit of .14 cents a share.  At any rate, it’s a good thing for the tax payers since we own a big chunk of the company.

Leading Economic Indicators were also released, up 1.4%.  The print was .4% better than market expectations but in reality, the index is such a rear view mirror piece of data that most traders blink as it goes by.  Speaking of data, it’s a light week with the next release due for Thursday and Friday.  Existing Home Sales, New Home Sales, and Durable Goods Orders will be the headliners.

The tactical bias for Austin mortgage rates and pricing is to remain neutral, trading a range on the 10 year note between 3.75% and 3.82%.  Stocks want clarity on the Goldman/SEC issue which will lead bonds to react accordingly.  Our work on the 10 year note chart is providing neutral to bullish trend signals and overbought conditions at the same time.  Classic example of a mixed bag.

Currently, the 10 year note is off 3/32’s (yield 3.78%), mortgage backs off 3/32’s, and stocks off 8 points on the big board.

Stock market strength has pressured bonds, notes, and mortgage backs as we head towards the close

Stock market strength has pressured bonds, notes, and mortgage backs as we head towards the close.  With the Dow up 96 points trading well over 11,000 and S & P’s over the 1200 level (which was good resistance and very psychological), the path of least resistance is for additional improvement.  JPMorgan gave stocks the boost from the get go, beating earnings expectations by 10 cents and saying all the right things about credit quality improving etc.  The 10 year note opened in the red but by only a few 32’s, holding onto the breakout level below 3.83% yield on the 10 year note.

That bullish momentum has been challenged as we are now trading at 3.86%.  Technically savvy traders call the formation a “double top” that you can see by the horizontal line across the top.  Confirmation is now being made as we have taken out the base from which the last leg of this rally started.  In chart terms you can see this is the level below 116 10 (closed futures session at 116 09).  Traders call this a “bear trap”, stranding the bulls on the expected breakout above 116 10.  Further confirmation of the next move being to worsening Austin mortgage pricing can be found in the fact that we failed to hold above both the 8 day and 21 day moving averages.  They cross the right side of the chart at 116 12.  SStochs have also made a bearish cross.

In proper context, the selling today has been a function of overbought readings and the need for consolidation.  We do not think its anything huge but will most likely correct to 115 31 on the chart (yield equivalent of 3.92%).  Mortgage backs are now down 11/32’s on the day and will probably give up at least another 8/32’s before we reach our target.  Time to be careful out there.