KENNETH BARGERS | In The News

Realtor, Tennis Player, Titans & Vols Fan, Nashvillian… Live! Work! Play! in Middle Tennessee

Market Comment for Week of November 22, 2010…

leave a comment »

MARKET COMMENT   Mortgage bond prices got crushed last week pushing rates considerably higher. Trading started negatively Monday when stronger than expected retail sales figures piled on top of the weakness seen the prior week. There was considerable profit taking as traders sold bonds. Tame inflation readings helped buffer some of the price increases and the Fed’s bond purchasing also helped but they were not enough to stem the negative trend of overall rising rates. For the week interest rates finished worse by about 1 1/2 discount points. 

The bond market will be closed Thursday for Thanksgiving. The market will also close at 2 pm ET Friday. This shortened trading week and the likely thin trading conditions could result in continued wild market swings. 

LOOKING AHEAD 

  • Q3 GDP second estimate; Nov. 23; Consensus Estimate 2.4%; Important. The aggregate measure of US economic production. Weakness may lead to lower rates.
  • Existing Home Sales; Nov. 23; Consensus Estimate 4.4m; Low importance. An indication of mortgage credit demand. Weakness decrease may lead to lower rates.
  • Personal Income and Outlays; Nov. 24; Consensus Estimate Up 0.5%, Up 0.5%;  Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates.
  • PCE Core Inflation; Nov. 24; Consensus Estimate Up 0.1%; Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve.
  • Durable Goods Orders; Nov. 24; Consensus Estimate Down 0.3%; Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates.
  • U of Michigan Consumer Sentiment; Nov. 24; Consensus Estimate 69.4; Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates.
  • New Home Sales; Nov. 24; Consensus Estimate 312k; Important. An indication of economic strength and credit demand. Weakness may lead to lower rates.

MORE AUCTIONS   The US Treasury will auction $35 billion of 2Y notes, $35 billion of 5Y notes, and $29 billion of 7Y notes this week. US Treasury bonds do not directly dictate fixed mortgage interest rate pricing however they do have an indirect impact. Both Treasuries and mortgage bonds often track in the same direction but this is not always the case. There are many times that Treasuries and mortgage bonds move inversely. 

The markets usually focus on the foreign demand component of the auction results. Despite the overwhelming size of the US economy, foreign investors can still have an effect on moving the financial markets. When foreign economies struggle foreign investors often purchase US based investments including mortgage bonds. This increase in demand usually causes mortgage bond prices to rise and interest rates to fall. This flight to quality buying was one of the factors that helped mortgage interest rates remain historically low in years past. 

The Treasury auctions this week will be important in determining the current appetite of foreign investors for dollar denominated securities. If this week’s auctions are poorly bid mortgage bond prices could fall pressuring mortgage interest rates higher. 

Source: Todd Kabel, US Bank; blog distribution by Kenneth Bargers of Bargers Solutions residential real estate located in Nashville, Tennessee.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Hiaco

Ad, Sales & Marketing.

Rachel Being Chatty

Now featuring 15% more sarcasm.

MovieBabble

The Casual Way to Discuss Movies

The Ninth Life

It's time to be inspired, become encouraged, and get uplifted!

MovieBabble

The Casual Way to Discuss Movies

The Shameful Sheep

shit storms, shame, and stories that make you cringe

Autoindigo Blog

Fresh news about automotive world. Cars overviews written by experts, pros and cons, features, performance, safety, interior and driving.

Little Fears

Tales of whimsy, humor and courgettes

www.virtual-reality-shop.co.uk/

VR, AR, 3D and Video Glasses Reviews

Woodstock Business Welcome

Welcome Wagon Canada

Blookup Blog

Turn and print all your digital contents, blogs and social networks into amazing real paper books on blookup.com

nalinidesignprofile

Graphic Designer

Sableyes

Sabbles woz 'ere

518-songofmypeople

A town everyone hates, yet no one leaves...

Attila Ovari

Loving Life and Inspiring Others

Augusta Littleton

Nonprofits and Charities

The Home Buyer Class Blog

What to know when buying a home

The Contractor's Cabinet

A Blog On Construction & More

Gamintraveler

Love, Travel Lifestyle and Destinations

kelzbelzphotography

My journey - The good, bad and the ugly

antryump

"A Blog worth reading "

john pavlovitz

Stuff That Needs To Be Said

Smart Discount Shop

Discover all the creative and ingenious ways to save money !

playwithlifeorg

4 out of 5 dentists recommend this WordPress.com site

ultimatemindsettoday

A great WordPress.com site

Vonj Productions

Bringing you love through spirit!

The Dystopian Nation of City-State

A cruel, futuristic vision created by science fiction authors James Courtney and Kaisy Wilkerson-Mills. ©2013-2016. All Rights Reserved. All writings available through Amazon.

Bubba Pigg

South' s Leading Anti- Intellectual: Wealthy in Common Sense and the Wisdom of Selfishness

@TheTexasBroker Blog

Real Estate Sales Houston Texas

The Travelling Pantry

Adventurous, Honest and Wholesome

Top 10 of Anything and Everything!!!

Animals, Gift Ideas, Travel, Books, Recycling Ideas and Many, Many More

meganelizabethmorales

MANNERS MAKETH MAN, LOST BOYS FAN & PERPETAUL CREATIVITY.

William the butler

Serving drinks since 1985

lauraagudelo272

This WordPress.com site is the bee's knees

Plutonium™ Paint

Ultra Supreme Professional Grade Aerosol Paint

Levi's Daily Thoughts

For I know that my Redeemer lives Job 19:25

Covered in Beer

by Thomas Cochran, Known Moron

Natalie Breuer

Natalie. Writer. Photographer. Etc.

Post it Notes from my Idiot Boss

delivered directly to my computer monitor on an all too regular basis...

Late Blooming Entrepreneurs

Making it big in business after age 40