Creating Wealth for my Family and Friends
Financial and Mortgage Bond Udate at Market Close on Sept 16th 2009
Given the run-up in the stock market today, the bond and mortgage markets managed to hold up well. That said, although we continue our longer view bullish for rates, in terms of trading we want to lock overnight.
A little choppy this morning but this afternoon things settled down with the rate markets ending the day with not much change. The various economic releases are continuing to be better than market forecasts; likely analysts are being conservative on coming up with estimates. Regardless, the markets are enjoying the relief that the recession is over, at least based on people like Bernanke and Warren Buffet.
While there hasn't been a huge increase in manufacturing, all the recent data has been stronger than estimates; from the Philly Fed to the ISM manufacturing and service sector reports, it is looking better. Interest rates are hanging tough even as the equity markets continue to advance; with no inflation investors buying the 10 yr note at 3.50% are actually getting a real rate of return about 5.00% as inflation based on CPI is -1.5%.
Got to watch the mortgage markets carefully, not as much buying in that sector in the past few weeks. Although the government is behind about every mortgage these days, and values are down and credit tightening is assuring the best quality in years, investors are still leery of the market. The MBS market continues to be non-functioning, contributing to investor reluctance to step in with both feet.
New York Attorney General Andrew Cuomo subpoenaed five members of BofA's board as he continues to spread his hand over anything that keeps his name in the press. The subpoena's are related to the Merrill Lynch deal with BofA. Cuomo is the "genius" behind the HVCC issue. That of course, has been a huge success as we all know. Cuomo said in a Sept. 8 letter some executives may face charges if the company doesn’t answer questions about the Merrill takeover. Who is this masked man? There will always be political hacks that make their bones by digging up dirt and playing catch up; very much like Barney the Frank.
Tomorrow being Thursday; weekly jobless claims at 8:30, expected to increase by 25K to 575K, earlier in the week the thought was an increase of 5K. August housing starts (also at 8:30) are expected to jump 3.2%, they were expected a lot lower early in the week. Building permits are estimated to decline 5.0%. Housing starts in July slipped from June's gain but the important single-family component continued its uptrend. Overall housing starts in July edged down 1.0% to an annualized pace of 0.581 million units. But single-family starts have risen five months in a row with this component rising 1.7%.
At 11:00 tomorrow Treasury will announce the amounts of next week's three auctions, the overall total will likely be in the neighborhood of $109B.
________________________________________
PRICES @ 4:00 PM
10 yr note: 101.10 -2/32 4.47% +1 BP
5 yr note: 99.22 -6/32 2.44% +4 BP
2 Yr note: 100.00 -4/32 0.99% +6 BP
30 yr bond: 104.04 +7/32 4.25% -1 BP
Libor Rates: 1 mo 0.243%; 3 mo 0.291%; 6 mo 0.676%; 1 yr 1.269%
30 yr FNMA 4.5 Nov: 100.05 +2/32 (+1/32 frm 10:00)
15 yr FNMA 4.0 Nov: 100.19 +3/32 (+2/32 frm 10:00)
30 yr GNMA 4.5 Nov: 100.10 unch (-1/32 frm 10:00)
15 yr GNMA 4.0 Nov: 101.10 +3/32 +2/32 frm 10:00)
Dollar/Yen: 90.80 -0.24 yen
Dollar/Euro: $1.4726 +$0.0070 (dollar weaker)
Gold Dec: $1019.90 +$13.60
Crude Oil Oct: $72.32 +$1.39
Goldman-Sachs
Commodity Index: 473.00 +10.28
DJIA: 9791.71 +108.30
NASDAQ: 2133.15 +30.51
S&P 500: 1068.75 +16.12
A little choppy this morning but this afternoon things settled down with the rate markets ending the day with not much change. The various economic releases are continuing to be better than market forecasts; likely analysts are being conservative on coming up with estimates. Regardless, the markets are enjoying the relief that the recession is over, at least based on people like Bernanke and Warren Buffet.
While there hasn't been a huge increase in manufacturing, all the recent data has been stronger than estimates; from the Philly Fed to the ISM manufacturing and service sector reports, it is looking better. Interest rates are hanging tough even as the equity markets continue to advance; with no inflation investors buying the 10 yr note at 3.50% are actually getting a real rate of return about 5.00% as inflation based on CPI is -1.5%.
Got to watch the mortgage markets carefully, not as much buying in that sector in the past few weeks. Although the government is behind about every mortgage these days, and values are down and credit tightening is assuring the best quality in years, investors are still leery of the market. The MBS market continues to be non-functioning, contributing to investor reluctance to step in with both feet.
New York Attorney General Andrew Cuomo subpoenaed five members of BofA's board as he continues to spread his hand over anything that keeps his name in the press. The subpoena's are related to the Merrill Lynch deal with BofA. Cuomo is the "genius" behind the HVCC issue. That of course, has been a huge success as we all know. Cuomo said in a Sept. 8 letter some executives may face charges if the company doesn’t answer questions about the Merrill takeover. Who is this masked man? There will always be political hacks that make their bones by digging up dirt and playing catch up; very much like Barney the Frank.
Tomorrow being Thursday; weekly jobless claims at 8:30, expected to increase by 25K to 575K, earlier in the week the thought was an increase of 5K. August housing starts (also at 8:30) are expected to jump 3.2%, they were expected a lot lower early in the week. Building permits are estimated to decline 5.0%. Housing starts in July slipped from June's gain but the important single-family component continued its uptrend. Overall housing starts in July edged down 1.0% to an annualized pace of 0.581 million units. But single-family starts have risen five months in a row with this component rising 1.7%.
At 11:00 tomorrow Treasury will announce the amounts of next week's three auctions, the overall total will likely be in the neighborhood of $109B.
________________________________________
PRICES @ 4:00 PM
10 yr note: 101.10 -2/32 4.47% +1 BP
5 yr note: 99.22 -6/32 2.44% +4 BP
2 Yr note: 100.00 -4/32 0.99% +6 BP
30 yr bond: 104.04 +7/32 4.25% -1 BP
Libor Rates: 1 mo 0.243%; 3 mo 0.291%; 6 mo 0.676%; 1 yr 1.269%
30 yr FNMA 4.5 Nov: 100.05 +2/32 (+1/32 frm 10:00)
15 yr FNMA 4.0 Nov: 100.19 +3/32 (+2/32 frm 10:00)
30 yr GNMA 4.5 Nov: 100.10 unch (-1/32 frm 10:00)
15 yr GNMA 4.0 Nov: 101.10 +3/32 +2/32 frm 10:00)
Dollar/Yen: 90.80 -0.24 yen
Dollar/Euro: $1.4726 +$0.0070 (dollar weaker)
Gold Dec: $1019.90 +$13.60
Crude Oil Oct: $72.32 +$1.39
Goldman-Sachs
Commodity Index: 473.00 +10.28
DJIA: 9791.71 +108.30
NASDAQ: 2133.15 +30.51
S&P 500: 1068.75 +16.12
Tags: bond, close, financial, market, reports, stock, trends, update
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