Austin Mortgage Blog

Posts Tagged ‘unemployment’

Although the market has done better today, the reflex rally has yet to do anything impressive

Late yesterday, sellers were starting to run out of bullets, allowing the market to steady out and start to recover.  That trend has continued this morning with the 10 year note currently up 9/32’s (yield 3.86%), mortgage backs up 6/32’s, and stocks up 40 something on the Dow.

Final 4^th Quarter GDP was revised lower from 5.9% to 5.6% and Consumer Confidence hit the tape unchanged month on month.  Regional Unemployment Rates remained unchanged according to the BLS.  The top spots for unemployment were Michigan (14.1%), Nevada (13.2%), Rhode Island (12.7%), California and South Dakota (12.5%), and Florida (12.2%).  It’s easy to see that states with a large auto presence and/or states that experienced stealth rallies in housing, leading to a bubble, have been hit the hardest.

Although the market has done better today, the reflex rally has yet to do anything impressive.  Typically this leads to a neutral, inside day with the pattern not strong enough to overtake the bearish sentiment of the past two days.  Usually, this type of short term bottom leads to a period of stalls and allows the moving averages to “catch up” to the market.  We expect that with month end buying, the market could make a run for 3.83% yield on the 10 year note (currently at 3.86%) before rolling over and retesting the bottom ( heading back to 3.93%).

Have a great weekend.

Using one standard deviation and a dart board, our bias is for 100k in job losses and a 9.9% unemployment rate

Let’s see what we have to deal with today; Sovereign debt problems in Greece continue to hold Euro zone hostage, massive short in our mortgage backed securities paper has traders scrambling, economic news such as Productivity, Factory Orders, Unemployment Claims, and Pending Home Sales, Treasury auction supply coming next week, and tomorrow’s weather skewed Employment Report due out at 7:30 am cst.  Just another day at the salt mine.

Weekly Unemployment Claims fell 27K to 469K as seasonal factors and the weather related snafu has everyone guessing is this real or Memorex.  The big picture points to the percentage of eligible people receiving unemployment benefits being 3.5%, well above the reading that creates jobs.  Seems to us that unemployment is stabilizing albeit at higher levels.  Not the makings of a vibrant economy.

Pending Home Sales looked like a Rottweiler as well, falling 7.6% in January.  Economists were looking for a plus 1.0% print.  Once again, the NAR Chief Lawrence Yun blames the weather for affecting home shopping.  Maybe we’ll get a clear read in July.  For the record, all regions were in the red with the West falling 13.2%.  Did it snow in California?

Factory Orders were up 1.7% with the ex-transportation up .1%.  A 15% gain in transportation orders did this trick for this number.  Maybe new accelerator parts for Toyota.  Productivity gains were off the chart, rising 6.9%.  The flip side was a drop in labor costs of 5.9%.  We are putting computers to work, not Joe the Plumber.  All of the above has flattened the yield curve with the 10 year note up 4/32’s and the bond plus 13/32’s.

One positive here is that until we work through this massive off sides market position in MBS, mortgage pricing will be supported, helping to keep pricing stable.  I’m going to give you our best guess on tomorrow’s jobs data.

Expectations for the February Employment Report are as follows;

1)      Non-Farm Payrolls – Minus 50K

2)      Unemployment – Rate 9.8%

3)      Hourly Earning – Plus .2 month on month

4)      Average Work Week – Minus .2

As we have been talking about, the weather is going to make a mess of the numbers.  We expect continued job losses in manufacturing, construction, and private services payrolls.  Construction should be hit the hardest, probably losing another 50K.  Consensus workers are a wild card as the government is expected to ramp up hiring, adding 1.2 million short term workers over time.

Using one standard deviation and a dart board, our bias is for 100k in job losses and a 9.9% unemployment rate.  JPMorgan has the call at minus 90K and 9.9%, Barclays at Minus 75K and 9.8%, Wells Fargo at minus 80k and 9.7%, and Credit Suisse the outlier at minus 125K and 9.9%.  If there is a miss, it will be towards more job losses than less.  You may recall that I wrote about John Ryding call that job losses would be minus 250K.  Don’t know if he is right but I do know he’s a pretty sharp dude.  What will the market do?  Most likely blow the numbers off due to distortions in the weather but trade nonetheless in a volatile fashion.  Once the dust settles, we would expect that pricing will be close to today’s levels “unless” the number is below expectations.

Let’s say we see a -25K or unchanged print.  We feel the market would interpret that to be much better than expected once you factor in the weather distortion.  Really, this one is a crap shoot.  Technically, we’re not getting much help as the 10 year note chart has formed a triangle pattern on the daily time frame.  We would need to close below 3.45% to turn this into a raging  bull (currently 3.61%) so not much help there.  Triangle patterns typically wind themselves up, tighter and tighter before a break out occurs.  Given the distance in basis points for a bullish outcome, we would side with a break out to higher yields/ worsening mortgage pricing to coincide with the ending of the short squeeze in the MBS market.  To put this in English and cut to the chase, be careful out in the days ahead.

With the consensus call for job losses of 50K, a number of economists are talking about 100K in losses with John Ryding, chief economist at RDQ Economics, calling for losses of 250K

No news today but lots to talk about.  The market dipped at the open on higher European Stocks and the Euro zone working with Greece to save its soul.   Take a look at mortgage delinquencies, up 21% year on year.  The FDIC asset backed sale is somewhat of a puzzle.  Seems as though the timing is poor.  Fed President Hoenig is making hawkish comments that the Fed should not guarantee markets with an extended period of low rates – zero rates are not sustainable and extended low rates may cause problems later.  At the same time, he is sounding like a dove, commenting  that he is very worried about unemployment and the long term position of the U.S. economy, deficits, and excess reserves.

Speaking of unemployment, Friday’s number could be as weird as it gets.  With the consensus call for job losses of 50K, a number of economists are talking about 100K in losses with John Ryding, chief economist at RDQ Economics, calling for losses of 250K.  Blame it on the weather.  With spreads so wide you could drive a truck through them, Friday’s print will be one volatile ride.  After being down as much as 7/32’s this morning. Mortgage backs have crept back a few 32’s.  Stocks have been up 30 to 40 points most of the day and the 10 year note now trades at 3.62%.  Honestly, most markets are as quiet as a church mouse! Call it neutral, treading water until the next headline breaks.

A trade above 3.61% on the 10 year note will tell you the bull has left the barn!

No news today but the calendar starts to heat up tomorrow with some housing data and Wholesale Inventories.  We will however, need to deal with 81 billion in auction paper (3’s, 10’s, and 30 year bonds) starting tomorrow.  Looks to me like the market is playing its own version of “We won’t get fooled again”, trying to balance risk premium, the Fed’s exit strategy, and the removal of stimulus with European sovereign debt issues (Portugal, Ireland Greece, Spain aka PIGS), unemployment, and Capitol Hill concerns.  Currently, the 10 year note is off 12/32’s (yield 3.59%), mortgage backs off 7/32’s, and stocks down 30 something on the big board.  Technically, the bias is for a defense/neutral trade with traders looking to sell the market at better levels.  On the plus side, the market has held at the upper end of the range but not been able to build on Friday’s breakout.  Momentum has fallen as traders set up for all of the above (auctions, etc.).  The pullback is helping to work off overbought conditions which is another plus.  Even the daily oscillators we follow continue their bullish trend.  Let’s call the market neutral but easily influenced by a number of cross winds.  A trade above 3.61% on the 10 year note will tell you the bull has left the barn!

Just a quick update as we are minutes away from the results of today’s 40 billion 10 year note auction

Just a quick update as we are minutes away from the results of today’s 40 billion 10 year note auction.  The market has slipped a touch, primarily due to hedging in front of the issue.  10 year note down 8/32’s (yield 3.75%), MBS off 5/32’s, and stocks up 33 points on the Dow.  The $10,000.00 question is who will or will not show up to buy the auction.  Deficits, taxes, unemployment, etc. etc. combine to make traders nervous.  Bid to cover and Indirect buyer percentage will be the key.  Expect a sharp pickup in volatility once the results hit the tape.  Both hands on the wheel as we approach the high noon cst data.

Austin Mortgage Market Update – For the week of November 30, 2009

For the week of November 30, 2009 – Vol. 7, Issue 48 >> Austin Mortgage Market Update INFO THAT HITS US WHERE WE LIVE The economic reports before Thanksgiving were packed with housing market data and, guess what, they were all extremely positive! Monday saw Existing Home Sales UP 10.1% to an annual rate of 6.10 million, the highest since February 2007. Sales are now UP 20% in the past two months and UP 36% from their January lows. Even better, the supply of existing homes was down to just 7 months, with inventories down to 3.57 million, the lowest level in almost three years. This puts existing homes very close to the 6-month supply level of a healthy housing market. The Case-Shiller 20-City Composite Home Price Index rose 0.3% in September. The index also showed its second consecutive quarterly increase, UP 3.1% for Q3, returning to August 2003 levels. Wednesday, New single-family Home Sales were UP 6.2% in October to an annual rate of 430,000 units. New Home Sales are now UP 30.7% over their January low. The unsold supply of new homes dropped to 6.7 months as of October, with inventories at 239,000, 58.2% down from their mid-2006 peak and at their lowest level since mid-1971. The median price was down only 0.5% from a year ago and average price down just 4.7%. Freddie Mac reported mortgage rates down for the fourth straight week, reaching historic lows well below 5%, with an average 0.7 point, for prime borrowers with 20% down payments. Freddie Mac’s chief economist said, “Interest rates for 30-year fixed-rate loans are currently 0.8 percentage points below this year’s peak set in mid-June, which shaves roughly $100 off the monthly payments on a $200,000 mortgage.” >> Review of Last Week TWO KINDS OF BLACK FRIDAY… Leading up to Thanksgiving, we had lots to be grateful for, with market gains and encouraging economic reports. Retailers’ Black Friday exceeded expectations, but unfortunate financial news from Dubai turned Wall Street’s Friday a depressing black, with the Dow losing 154 points on the day. The Dubai government announced there would be a six-month “standstill” on debt repayments for Dubai World, its holding company. This sent world markets reeling with fears of multi-billion dollar defaults. But Dubai is part of the super-wealthy United Arab Emirates (U.A.E.), which should provide deep support. In addition, Dubai’s debt is mostly held by U.K. and European banks, with little U.S. involvement. The situation bears watching, although our recovery remains clearly on track. On Tuesday, for example, Q3 GDP growth was revised down to a still substantial 2.8% annual rate. The key item in the report was the look at Q3 corporate profits, which grew at a very strong 50% annual rate, the third consecutive quarterly increase. Wednesday, initial jobless claims dropped to 466,000, sending the four-week moving average down to 496,500, below the level a year ago. Continuing claims are now down to 5.423 million. The Richmond Fed Manufacturing index showed expansion of activity for the seventh straight month. Consumer Confidence went up to 49.5 for November, beating consensus estimates. This tied in nicely with Wednesday’s reports showing personal incomes are rising, consumer spending is up and the savings rate is 4.4% vs. 1.7% just two years ago. Even non-mortgage consumer debt is down 5% from its mid-2008 peak. Nonetheless, the Dubai surprise left the Dow off 0.1% for the week, at 10309.92; the S&P 500 was up just 0.11 points, to 1091.49; while the Nasdaq slipped 0.4%, to 2138.44. Prices held higher in the bond market, as investors anticipate the fall-out from Dubai and its state supported debt issues. The FNMA 30-year 4.5% bond we watch ended up 72bp from the previous week’s close, finishing at $102.50. Mortgage rates, as noted above, fell last week to historically low levels! >> This Week’s Forecast FOCUS ON JOBS… The week opens with insight into the continually improving manufacturing sector, while Pending Home Sales figures hold our interest on Tuesday. But the real focus for the week will be on Friday’s November jobs report. Analysts will be looking for further signs of recovery in this lagging economic indicator. The consensus expects the unemployment rate to plateau, which is an improvement over rates on the rise. >> The Week’s Economic Indicator Calendar Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. Economic Calendar for the Week of November 30 – December 4 Date Time (ET) Release For Consensus Prior Impact M Nov 30 09:45 Chicago PMI Index Nov 53.0 54.2 HIGH Tu Dec 1 10:00 ISM Index Nov 54.8 55.7 HIGH Tu Dec 1 10:00 Pending Home Sales Oct –0.5% 6.1% Moderate W Dec 2 10:30 Crude Inventories 11/27 NA 1.02M Moderate Th Dec 3 08:30 Initial Unemployment Claims 11/28 483K 466K Moderate Th Dec 3 08:30 Continuing Unemployment Claims 11/21 5.517M 5.423M Moderate Th Dec 3 08:30 Productivity–Rev. Q3 8.5% 9.5% Moderate Th Dec 3 08:30 Employment Cost Index Q4 NA 0.4% HIGH Th Dec 3 10:00 ISM Services Index Nov 51.5 50.6 Moderate F Dec 4 08:30 Average Workweek Nov 33.1 33.0 HIGH F Dec 4 08:30 Hourly Earnings Nov 0.2% 0.3% HIGH F Dec 4 08:30 Nonfarm Payrolls Nov –114K –190K HIGH F Dec 4 08:30 Unemployment Rate Nov 10.2% 10.2% HIGH >> Federal Reserve Watch Forecasting Federal Reserve policy changes in coming months. The Fed continues to affirm it will keep rates down until the recovery looks more solid, but inflation is always a concern. Overall consumer prices in the last six months are up at an annual rate of 2.7%, but economists don’t expect any rate changes in the near future. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%–0.25% After FOMC meeting on: Consensus Dec 15 0%–0.25% Jan 27 0%–0.25% Mar 16 0%–0.25% Probability of change from current policy: After FOMC meeting on: Consensus Dec 15 1% Jan 27 1% Mar 16 3% ß This blog entry is an advertisement for Max Leaman. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is copyrighted by PrimeLending, A PlainsCapital Company and cannot be reproduced for any use without prior written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer distribution. The material does not represent the opinion of PrimeLending, A PlainsCapital Company. Š 2009 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, a PlainsCapital Company (NMLS #: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AL, AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NY, NC, OH, OK, OR, PA, SC, SD, TX, UT, VA, WV, WY. Licensed by the Arizona Dept. of Financial Institutions-license #BK 0907334; California Department of Real Estate-license ID #01857468; California Department of Corporations- license #4130996; Connecticut Department of Banking-license #ML-13649; District of Columbia Department of Insurance, Securities and Banking- license #MLO13649, Illinois Dept. of Financial and Professional Regulation-license #MB.6760635; Indiana Dept. of Financial Institutions- license #11169; Maine Dept. of Professional & Financial Regulation-license #SLM8285; Maryland Dept. of Labor, Licensing & Regulation-license #11058; Massachusetts Division of Banking- license # MC5404, Michigan Dept. of Labor & Economic Growth-license #FR 0010163 and SR 0012527; Nevada Dept. of Business and Industry, Division of Mortgage lending-exempt license #732; New Hampshire Dept. of Banking- license #14553-MB; New Jersey Dept. of Banking and Insurance-license #0803658; New Mexico Regulation and Licensing Dept., Financial Institutions Division-license #01890; North Dakota Dept. of Financial Institutions-license #MB101786; Tennessee Dept. of Financial Institutions-registration #4023; Texas Regulated Loan License-license #7293; Vermont Dept. of Banking, Insurance, Securities and Health Care Administration- lender license #6127 and broker license #0964MB; Washington Dept. of Financial Institutions-license #520-CL-49075; Wisconsin Department of Financial Institutions-license #214170. NMLS# 151263

October Housing Starts fell 10.6%: some have blamed the fall on uncertainty over the 8K first time home buyers stimulus while others point to a consumer who is unemployed and over budget

CPI was suppose to be the day’s headliner but Housing Starts stole the show.  While CPI, inflation at the consumer level, was in line with expectations (up .3% with the core index up .2%), October Housing Starts fell 10.6% to 529k units (annualized).  The decline was in large part due to a 33.3% drop in multi-family homes (5 units or more), setting a new record low.  Building Permits fell as well, down 4.0% to 552K.  Every region in the country took a dip with the Northeast leading the way (down 9.6%).  The best performing region was the wild West, off 5.9%.  Some have blamed the fall on uncertainty over the 8K first time home buyers stimulus while others point to a consumer who is unemployed and over budget.

The MBA Purchase Index reflects the latter with new applications off 4.7% even though interest rates are low.  Reinforces our belief that the Fed will continue to buy mortgage backed securities, helping to keep mortgage rates low into the new year.  Market reaction to all of the above has been a bit choppy.  Mortgage backs were down as much as 10/32’s this morning, in line with fast money selling of treasuries.  We have started to recover but are still off 6/32’s.  Stocks opened slightly lower, then accelerated to the downside but have now cut their losses in half (Dow down 37 points).  The dollar index is once again on the slide, falling below 75 after yesterday’s brief, dead cat bounce ( no offence cat lovers).  The slide has everything to do with the Obama Administration trying to convince the Chinese to let the Yuan appreciate, helping American exports.  Fat chance given their (China’s) treasury and real estate holdings in the U.S.

Technically speaking, the market continues to rattle around within the confines of a bullish upward sloping trend channel.  Most oscillators, including trend intensity are giving bullish reading yet the chart fails to make new highs.  This is somewhat of a concern so we need to be careful.  That said, the onus is still on the bears to take control which just hasn’t happened.  We like the market but want to see a new high (lower yield on the 10 year) by week’s end.

With stocks near unchanged and a basket of economic uncertainty, best to not throw caution to the wind

PPI, inflation at the wholesale level, rose .3% headline yet dropped .6% on the core index (ex-food and energy).  Both numbers were below economist’s expectations and show little to nothing by way of inflation in the pipeline.  Industrial Production/Capacity Utilization were also on the tape, up .1 IP while Cap U came in at 70.7%.  The rise in IP was below expectations but continued a string of gains that has lasted 4 months.  Cap U made it 4 months in a row as well, showing us that there is still considerable slack in the economy yet stability is staring to creep back in to industrial output.  Big Ben put on a good show yesterday, talking the talk about the Fed’s main concerns on unemployment and inflation.  Try as he may, the market seems to doubt that he can pull it off, that is putting people back to work and controlling inflation.

His mandate for low interest rates well into the future, coupled with a staggering deficit, falling dollar, 3 trillion in health care costs on the docket, and taxes for both individuals and small business destine to rise in 2010 will create difficult challenges and unintended consequences.  With the Fed policy a given, we expect to see a floor under the bond market, supporting both treasury and mortgage back security pricing.  Buying sponsorship (upcoming auctions) and year end book closings will be the challenge (liquidity issues).

The 10 year note and mortgage backs were very overbought as well, giving us a text book sell as consolidation set in.  Mortgage backs were off as much as 12/32’s early today but have boot strapped themselves back to cut the losses in half.  We traded right back down to good support and that up sloping trend line I showed you last week.  So far, it has held.  We also like the fact that the chart has held closer to yesterday’s highs versus today’s lows, giving the chart a neutral, inside day appearance.

With stocks near unchanged and a basket of economic uncertainty, best to not throw caution to the wind.

Since stocks are the game today, let’s talk the equities and your 401K

Not much to report today as the bond market is closed for Veterans Day.  Stocks are trading, up 27 points on the Dow and 11 points on the Naz.  Dovish comments out of yesterday’s string of Fed speakers has given the equity market a boost.  We are trading 10 year note futures electronically and Europe is trading cash treasuries.  Both are doing a little better than yesterday’s close with the 10 year note up 8/32’s.  Should provide for steady to slightly better mortgage pricing in the morning.

Since stocks are the game today, let’s talk the equities and your 401K.  Can the market rally without the leaders?  Why is the Dow at a new high while the Nasdaq/S&P are lagging behind?  You have to keep in mind that the Dow is a price weighted index while the other indexes are cap weighted machines.  Another factor is that Banks and other financial institutions, which led the market back from the March abyss, have failed to continue their rally over the past couple of months.  Part of this is due to the fragmented playing field such as JPMorgan versus Citi.  Some are making decent profits while others are on life support.  With regulatory concerns waiting in the wings, it will be difficult for this sector to gain any traction.  One of two things will happen.  Either the economy will improve and bring the banks with it or another sector, say technology or commodities will become the new leader.  Given the backdrop of a slow, two to three year economic recovery, along with pending tax increases and regulatory concerns, it’s hard to see much more than a 10% addition gain (Dow) in the cards.

10% plus unemployment and a weak U.S. dollar are ok short term but stock bearish in the long run.  With this in mind, we still have the Fed and it’s never ending easy money program, very low inflation, and market risk that will support the bond/MBS market well into 2010.  Blue chip, high quality companies are the only way to go in today’s stock market.  As for mortgage pricing, it’s “steady as she goes ” into the new year.

Inside Lending: Austin Mortgage Market Update For the week of October 12, 2009

For the week of October 12, 2009 – Vol. 7, Issue 41 >> Austin Mortgage Market Update INFO THAT HITS US WHERE WE LIVE At the end of September, the supply of homes for sale was reported down 1.8% from the previous month in 27 major metropolitan areas. We all know the factors. Home prices are very affordable, mortgage rates and very favorable and first-time homebuyers are taking advantage of the $8,000 tax credit set to expire at the end of November, now just seven weeks away. The Mortgage Bankers Association saw loan applications for home purchases rise 13.2% last week, as the MBA’s Purchase Index hit its highest level since last January. The average rate on 30-year fixed rate mortgage slid to 4.89% with an average 1.13 points (including the origination fee) for 80% loan-to-value ratio loans to borrowers with good credit. Freddie Mac’s weekly survey of conforming mortgage rates put the average 30-year fixed rate mortgage at 4.87% with an average 0.7 point for 80% loan-to-value ratio loans to borrowers with good credit. >> Review of Last Week BOUNCING BACK… The markets had lost ground for two weeks straight, but last week they got back on track with a vengeance. Hints at good Q3 corporate earnings helped. Some retailers also reported September sales that indicate the consumer is ready to step up to the plate and contribute to the recovery. We also had the ISM Services index increasing to 50.9 in September, putting it in territory that signals expansion for the non-manufacturing part of our economy.Corporate earnings season got off to a nice start with Alcoa breaking its string of three straight quarterly losses with a surprise profit for Q3, and not just from cost cutting but also from higher sales. We even had good news from retailers encouraged by better-than-expected September numbers. Target, Kohl’s, J.C. Penney and TJX all raised their Q3 or second half profit outlooks. Initial claims for unemployment came in at 521,000, their lowest level since the first week of the year and continuing claims dropped 72,000, to 6.04 million. There are now economists who expect at least one month with net payroll gains before the year is out. The week ended with the trade deficit declining to $30.7 billion for August. Experts feel this solid showing for U.S. exports supports the case for a strong global recovery, with the U.S. helping supply capital goods to the rest of the world. For the week, the Dow ended UP 4.0%, to 9864.94; the S&P 500 was UP 4.5%, to 1071.49; while the Nasdaq also rose 4.5%, to 2139.28. The soaring stock market and a weak auction of Treasuries sent the bond market reeling, putting pressure on prices, including some mortgage backed securities. This included the FNMA 30-year 4.5% bond we watch, which was hammered down from the previous week’s $101.66 close, dropping to $100.91. But, as reported above, mortgage rates stayed in super low territory. >> This Week’s Forecast MORE ON CONSUMERS, INFLATION AND MANUFACTURING… In spite of everything being squeezed into three days, it’s a pretty full week of economic reports. Retail Sales give us an update on the consumer’s willingness to contribute to the recovery and CPI readings keep an eye on inflation. The Philadelphia Fed Index, Industrial Production and Capacity numbers gauge manufacturing. The FOMC Minutes give us more on the Fed’s view of the economy from their meeting on September 23. >> The Week’s Economic Indicator Calendar Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. Economic Calendar for the Week of October 12 – October 16 Date Time (ET) Release For Consensus Prior Impact W Oct 14 08:30 Retail Sales Sep –2.1% 2.7% HIGH W Oct 14 08:30 Retail Sales ex-auto Sep 0.2% 1.1% HIGH W Oct 14 10:00 Business Inventories Aug –0.9% –1.0% Moderate W Oct 14 14:00 FOMC Minutes Sep HIGH Th Oct 15 08:30 Initial Unemployment Claims 10/10 525K 521K Moderate Th Oct 15 08:30 Continuing Unemployment Claims 10/3 6.06M 6.04M Moderate Th Oct 15 08:30 Consumer Price Index (CPI) Sep 0.2% 0.4% HIGH Th Oct 15 08:30 Core CPI Sep 0.1% 0.1% HIGH Th Oct 15 10:00 Philadelphia Fed Index Oct 12.3 14.1 HIGH Th Oct 15 13:00 Crude Inventories 10/9 NA –0.98M Moderate F Oct 16 09:15 Industrial Production Sep 0.1% 0.8% Moderate F Oct 16 09:15 Capacity Utilization Sep 69.7% 69.6% Moderate F Oct 16 09:55 Univ. of Michigan Consumer Sentiment–Prelim. Oct 73.5 73.5 Moderate >> Federal Reserve Watch Forecasting Federal Reserve policy changes in coming months. Fed Chairman Ben Bernanke told Congress last Thursday that interest rates will probably stay low for some time. But he also said that as the economy recovers, the Fed won’t hesitate raising rates If inflation picks up. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%–0.25% After FOMC meeting on: Consensus Nov 4 0%–0.25% Dec 15 0%–0.25% Jan 27 0%–0.25% Probability of change from current policy: After FOMC meeting on: Consensus Nov 4 1% Dec 15 3% Jan 27 13%

This blog post is an advertisement for Max Leaman. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is copyrighted by PrimeLending, A PlainsCapital Company and cannot be reproduced for any use without prior written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer distribution. The material does not represent the opinion of PrimeLending, A PlainsCapital Company. Š 2009 PrimeLending, a PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, a PlainsCapital Company is exempt from licensing in the following states: AL, AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NC, NE, NV, NY, OH, OK, OR, PA, SC, SD, TX, UT, VA, WV, WY. Arizona Mortgage Banker Number License Number 0907334; California Department of Real Estate License Number 01857468; Connecticut Mortgage Lender License Number ML-13649; Illinois Mortgage banker License number MB.6760635; Maine Supervised Lender License Number SLM8285; Maryland Mortgage Lender License number 11058; Michigan First Mortgage Registrant License Number FR 0010163 and Second Mortgage Registrant License Number SR 0012527; New Jersey Licensed Lender Number 083659; New Mexico Mortgage Loan Company License Number 01890; North Dakota Money Broker License number MB101786; Tennessee Mortgage Registrant Number 4023; Texas Regulated Loan License Number 7293; Vermont Mortgage Banker license Number 6127; Vermont Mortgage Broker license Number 0964MB; Washington Consumer Loan License Number 520-CL-49075; Wisconsin Mortgage banker License number 214170. NMLS# 151263