My New Blog

Weekend Market Update

May 29-30, 2010

Jumbo loan borrowers who got accustomed to seeing rates in the 8’s and 7’s over the past few years should take a look at my Jumbo rates below. A fixed-rate Jumbo in the mid-5’s can open up buying opportunities for this relatively difficult borrowing niche. Realtors, call me to work up scenarios for your Jumbo listings.

The stampede of money out of stocks and into Treasuries and mortgage-backeds slammed on the brakes Thursday before returning to the near-term trend on Friday. The Dow Jones Industrial Average dropped 122 points on Friday and closed at 10,136, which represented a decline of 7.92% for the month, making it the worst May percentage performance since 1940. Its 871.98 drop in aggregate points was the largest May point drop in history.

The 10-year U.S. Treasury touched a low yield of 3.1% this week before ending at a yield of 3.3% at Friday’s close. Technical resistance thus held and remained established just below 3.3% and just above 3.1%. That range was last touched with a sharp down spike pattern like this one---but was not penetrated---on Oct. 7 and Dec. 1, 2009.

That technical reading tells us we have re-visited the bottom and cannot expect rates to move lower from here. If that level is pierced on the down side for the 10-year Treasury, however, on heavy trading volume, a new down leg in rates could be signaled. Price and rate move in opposite directions in trading bonds and Treasuries---when bonds are being bought, the price goes up and the rate goes down, and vice versa.

Markets this month have been responding to bad news, such as the European debt crisis.  A bad day for stocks is often a good day for mortgage rates.  Mortgage rate pricing was slightly higher week-over-week after also recently touching lows of the year. Mortgage rates loosely correlate with Treasuries.

Mortgage rates remain in a channel of historic lows, but this opportunity will be meaningless unless buyers and borrowers commit to taking action. Call me for a free pre-approval and loan strategy for would-be buyers, and call me for a free refinance checkup to confirm whether you can improve your situation with a new refinance.

30-Year Conventional Fixed

4.75% $100,000-$417,000


FHA-100% VA

4.75% $100,000-$393,300


30-Year Jumbo Fixed

5.5% $417,001-$900,000

(Interest-only available-Call me)

THDA Great Start

5.35% $100,000-$393,300

4% of sales price Gift

Call for free pre-approval and to discover

the best financing for you!

...by Gary Moore

Mortgage Planner, First Community Mortgage

...a subsidiary of First Community Bank

Cell: 615-579-8658  Toll-free fax: 866-321-6513

“Collective fear stimulates herd instinct, and tends to produce ferocity toward those who are not regarded as members of the herd.” – Bertrand Russell

Visit my real estate website:

http://www.RealCarte.com

Visit my mortgage website:

http://www.BrentwoodHomeLoan.com

(0% points, 1% origination. Market Update informs consumers and Realtors on market trends, offers subjective opinions and is not a quote for a unique borrower.)

Weekend Market Update

May 22-23, 2010

Mortgage interest rates fell to lows for 2010 as bad news for other markets drove money into safer instruments, such as U.S. Treasuries. Mortgage-backed securities have not moved in 1-to-1 lockstep with Treasuries during this cycle, but on Friday they went along for the ride sufficiently to plunge into the mid-4s.

Call me ASAP to get your refinance application in the house so that we can lock a rate in this range.

The 10-year Treasury closed at a yield of 3.2%, its lowest in 2010.

The Euro hit a four-year low of $1.21 mid-week on nagging worries that the Greek debt crisis will continue to drag down the rest of the Euro zone economy and possibly spread beyond Europe. By Friday the beleaguered currency had rebounded to nearly $1.26, but it is down 13% for the year.

Major stock market indices were down more than 4% for the week, and the Dow average, the S&P and Nasdaq entered the “correction” zone of down 10% from the previous high, which was just set in April. The Dow swung 279.71 points on Friday, dipping below the 10,000 mark before erasing all of its losses to close up 125 points for the day.

On Friday the CBOE’s volatility index, VIX, hit a 15-month high of 48.2 as the selling continued. That mark was last seen in March 2009, when the market bottomed with the Dow in the mid-6,000s.

30-Year Conventional Fixed

4.5% $100,000-$417,000


FHA-100% VA

4.75% $100,000-$393,300


30-Year Jumbo Fixed

5.5% $417,001-$900,000

(Interest-only available-Call me)

5.35% $100,000-$393,300

4% of sales price Gift

Call for free pre-approval and to discover

the best financing for you!

...by Gary Moore

Mortgage Planner, First Community Mortgage

...a subsidiary of First Community Bank

Cell: 615-579-8658  Toll-free fax: 866-321-6513

"Nothing beats a little cash in a bear market, of course, and the oldest form of cash is gold." - James Grant

(0% points, 1% origination. Market Update informs consumers and Realtors on market trends, offers subjective opinions and is not a quote for a unique borrower.)

Weekend Market Update

May 15-16, 2010

Stocks fell on Friday on a combination of weak earnings from retailers, Senate backing for limits on credit card fees and concerns over the sustainability of European public debt.

Bank and credit card companies' shares slumped a day after the Senate voted to limit fees charged on credit and debit card transactions. The limits added to fears that beefed-up financial reform legislation could hurt profits in the sector. Visa's stock fell almost 10 percent. Gary’s comment: Boo-hoo, I hate it for the credit card thugs.

Investors who had taken comfort in signs of strength in the U.S. economy were faced with more below-par forecasts from retailers such as Nordstrom and J.C. Penney, casting doubt on the strength of the recovery in consumer spending.

Daily volume was above average while declining stocks outnumbered advancers by a ratio of about 7 to 1 on the New York Stock Exchange. The CBOE Volatility Index, or VIX, a measure of market turbulence, surged 17.1 percent to 31.24, echoing moves when the stock market plunged last week.

Stocks had rallied sharply on Monday after news that European Union finance ministers had agreed to a $1 trillion aid package for debt-laden Greece. But the optimism was short-lived, with stocks down three days this week as market watchers said, not so fast---where is the money coming from and how is Greece going to repay it?

Despite Friday's sharp sell-off, all three major U.S. stock indexes scored their biggest weekly percentage advance in the last 10 weeks, thanks largely to Monday's gains.

For the week, the Dow rose 2.3 percent, the S&P 500 added 2.2 percent and the Nasdaq climbed 3.6 percent. However, after the recent volatility the Dow and the S&P 500 are up just 1.8 percent for the year, while the Nasdaq is up 3.4 percent.

As the initial optimism over moves to stem the euro-zone debt crisis ebbed, investors moved out of riskier assets. Global shares and commodity prices dropped sharply while the euro sank to an 18-month low against the dollar. Gold, a classic safety play, hit a record high before getting caught up in the commodities sell-off.

Shares of British Petroleum (BP) broke down on Friday after CEO Tony Hayward conceded the firm was caught off guard by the April 20 explosion on the Deepwater Horizon rig in the Gulf of Mexico, and President Obama met with cabinet members to consider further action that could be taken to contain the spill.

Hayward told journalists Wednesday night in Houston that it was “probably true” that the firm “should have done more” to prepare for such an emergency, according to an article Friday in the Wall Street Journal.

Estimates continue to creep up for the pace of the spill. A Purdue University researcher, analyzing underwater footage, said on NPR that the pace of the spill is 70,000 barrels per day, more than ten times the 5,000 cited by BP. and a Florida State University research team told the New York Times the rate of spill could be at least four or five times the 5,000 figure.

BP shares are off 23% since April 20, a loss of $44 billion in market capitalization.

Transocean (RIG), meantime, the owner of the Deepwater Horizon, was off $1.57, or 2.4%, at $65.12. Halliburton (HAL), which provided contract services in setting up and maintaining the rig, was off 90 cents, or 3%, at $28.11.

And Cameron International (CAM), which made the blowout preventer that may or may not have failed to prevent the blast, was down $1.10, or 3%, at $37, which is significant for a stock that had held up relatively well during most of this.

The 10-year U.S. Treasury note closed at a yield of 3.44%. Mortgage interest rates remained under generally downward pressure this week as money moved to Treasuries and mortgage-backed securities during spells of weakness in stocks.

30-Year Conventional Fixed

4.75% $100,000-$417,000


FHA-100% VA

5% $100,000-$393,300


30-Year Jumbo Fixed

5.75% $417,001-$900,000

(Interest-only available-Call me)

THDA Great Start

5.35% $100,000-$393,300

4% of sales price Gift

Call for free pre-approval and to discover

the best financing for you!

...by Gary Moore

Mortgage Planner, First Community Mortgage

...a subsidiary of First Community Bank

Cell: 615-579-8658   Toll-free fax: 866-321-6513

“Collective fear stimulates herd instinct and tends to produce ferocity toward those who are not regarded as members of the herd.” –Bertrand Russell

Visit my mortgage website:

http://www.BrentwoodHomeLoan.com

Weekend Market Update

May 8-9, 2010

U.S. Treasury issues and mortgage-backed securities often benefit when stocks are being sold, and this week was a classic example as equity markets plunged and Treasuries were being bought as a safe place to park money. Mortgage rates softened from the move, but not to the same magnitude as Treasuries, as the spread---the difference between Treasury pricing and the Fannie Mae mortgage contract---widened with Treasuries outpacing mortgage buying. This was accompanied by the Euro plunging vs. the USD.

Not even a positive employment report could stem the tide of selling as the Dow Jones average dropped 5.7% for the week and closed at 10,380, more than 900 points below its 52-week closing high of 11,205, which was just set April 23. The VIX, or volatility index, spiked to above 40 at Friday’s close. Trending high volatility has been a precursor to massive selloffs and bear markets in the past. If the VIX crosses 50, it’s Katie bar the door.

Rioting in Greece amid that country being on the brink of financial collapse---and fears that Portugal will be next and that other European countries, and even Great Britain, may follow with sovereign debt issues---drove panicked sellers to dominate the markets. Money flowed into the perceived safety of U.S. Treasuries with such demand that yields fell, with the government being able to sell debt and pay out less interest. The 10-year Treasury closed at a yield of 3.43%, and the Fannie Mae mortgage contract gained 74 basis points for the week, which roughly translates to an improvement of between .125 and .25 in rate.

After stocks dropped by more than 1,000 points intra-day on Thursday, rumors circulated that a trader at Citigroup had entered an order that mistakenly added three zeroes---in other words, a billion units vs. a mere million. I am not sure what the trade consisted of, beyond a basket of stocks that triggered a sell signal, but Proctor and Gamble stock was cut in half at one point and Accenture PLC dropped from $41 a shares to one penny. While the three zeroes entry makes a good story, it was more likely a computerized program trade of “intermarket sweep orders” which skewed trading radically and temporarily.

Private employers stepped up job creation in April, expanding payrolls by 231,000, the strongest surge since March 2006. With another 66,000 temporary government jobs created to conduct the census, the total for April settled at 290,000. However, with more jobs available, 805,000 job-seekers returned to their search for work, causing the unemployment rate to rise 0.2% to 9.9% overall.

30-Year Conventional Fixed

4.75% $100,000-$417,000


FHA-100% VA

5% $100,000-$393,300


30-Year Jumbo Fixed

5.75% $417,001-$900,000

(Interest-only available-Call me)

THDA Great Start

5.35% $100,000-$393,300

4% of sales price Gift

Call for free pre-approval and to discover

the best financing for you!

...by Gary Moore

Mortgage Planner, First Community Mortgage

...a subsidiary of First Community Bank

Cell: 615-579-8658 Toll-free fax: 866-321-6513

"It's not the most intellectual job in the world, but I do have to know the letters." - Vanna White

Visit my mortgage website:

http://www.BrentwoodHomeLoan.com

(0% points, 1% origination. Market Update informs consumers and Realtors on market trends, offers subjective opinions and is not a quote for a unique borrower.)

Weekend Market Update

May 1-2, 2010

U.S. stocks closed their worst week since January, and Treasuries rallied on Friday, extending weekly and monthly gains and sending yields lower, as a report showing the U.S. economy expanded in the first quarter failed to curb the market’s appetite for U.S. debt as a safe-haven play.

Stocks were under siege while Goldman Sachs traders and top brass squirmed and double-talked their way through televised testimony before a Congressional committee investigating Goldman’s role in the mortgage meltdown. Goldman allegedly was pooling subprime mortgages and wrapping them up in a AAA-rating bow to individual investors, while scoffing at the “widows and orphans” in company emails and boasting about profits from shorting---betting those investments would drop---subprime pools. Goldman is being prosecuted criminally and sued civilly for its actions.

The 10-year Treasury note yielded 3.65% at market close. For the week, yields dropped 15 basis points as Treasuries gained in price. Bonds yields move inversely to prices. A basis point equals 0.01%. The Dow Jones average of large-cap stocks fell 158 points on Friday yet closed above the 11,000 mark.

Mortgage interest rates, which usually correlate with the 10-year Treasury and often move opposite of stocks, continued to defy consensus opinion and remained in the very low end of this year’s range. It was a good week to lock a mortgage rate. Conventional wisdom has it that interest rates will rise this year; some market watchers had expected that increase to come after the U.S. Treasury quit its buying of mortgages about a month ago.

The Federal Open Market Committee met this week and left its short-term Fed funds rate unchanged, but the FOMC did note some signs of an improving economy, which indicates higher rates, and some Fed governors ---not the majority, obviously---wanted to raise the Fed rate immediately.

One of my sources inside the Tennessee Housing Development Agency said that the U.S. Treasury will buy THDA pooled mortgages in the near future. The source also said that the last THDA tax-free bond issue was bought up entirely by individual investors. THDA’s Great Start program gives a 4% of sales price gift to qualified first-time home buyers. Look for the gift amount to increase later this year.

30-Year Conventional Fixed

4.875% $100,000-$417,000


FHA-100% VA

5% $100,000-$393,300


30-Year Jumbo Fixed

5.875% $417,001-$900,000

(Interest-only available-Call me)

THDA Great Start

5.35% $100,000-$393,300

4% of sales price Gift

Call for free pre-approval and to discover

the best financing for you!

...by Gary Moore

Mortgage Planner, First Community Mortgage

...a subsidiary of First Community Bank

Cell: 615-579-8658  Toll-free fax: 866-321-6513

"We are not retreating - we are advancing in another direction."

- General Douglas MacArthur

Visit my real estate website:

http://www.RealCarte.com


Visit my mortgage website:

http://www.BrentwoodHomeLoan.com

(0% points, 1% origination. Market Update informs consumers and Realtors on market trends, offers subjective opinions and is not a quote for a unique borrower.)