The Dow is currently trading at 13,058 lower by 314 pts over last week. The S&P 500 is trading higher at 1,405. Gold is trading at $1,715 an ounce, while oil futures at $85.82 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.85/Gal.
Yields on 10-year notes, which move inversely to prices, are trading at 1.75%. 30-year bond yields are trading at 2.92%. Mortgages or FNMA 3.5% MBS (Mortgage Backed Security) is currently at 106.41 still experiencing a small correction. Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate.
In economic news this week; First-time applications for unemployment benefits declined last week, but the number of new claims filed has changed very little over the past few months in a reflection of slow hiring trends.
The Fed Gods continued to express concern about the U.S. economy as they maintained their ultra-easy policy stance. In their statement released Wednesday, the Fed said that growth has been moderate. While consumer spending has picked up, business spending has slowed. The Fed also said that inflation has picked up somewhat, due to higher energy prices. The central bank remains concerned that without the easing moves that consists of $40 billion monthly in mortgage-backed securities, growth would not be strong enough to improve the labor market. In its statement, the Fed didn’t change the open-ended nature of the MBS purchases, repeating that they would continue until the labor market outlook improved “substantially.”
Sales of new single-family homes in the rose 5.7% in September to an annual rate of 389,000, the highest pace since April 2010. The expectation was for a small rise given recent gains in other housing-market data, such as confidence among home builders, as well as housing starts and permits.
Durable goods or orders for long-lasting goods rose 9.9% in September, the biggest gain in more than two and a half years, mostly because of a rebound in bookings for commercial jets, but demand for manufacturing goods outside of aircraft was soft. I guess when the seats start coming unbolted from the floor of the plane it’s time to renew. Orders in August had declined by the largest amount in three years.
Third quarter Gross Domestic Product or GDP was released this morning and was higher than expected at 2.0% but mostly due in part to government spending. Consumer spending, which has the biggest impact on GDP, rose 2.0% in the July-to-September period, compared to 1.5% in the second quarter. Government spending jumped 3.7% mainly because of higher defense outlays. Also, investment in housing surged 14.4%.
If you know anyone who can benefit from my services as a trusted Mortgage Advisor, please call me. My greatest goal is to see clients and friends happy. I guess that’s why I love providing mortgage financing. It’s an immediate gratification when you can help someone purchase a home, or lower their payment on their existing home.