November 28, 2008
November 28, 2008 by admin
Black Friday, the biggest shopping day of the year will be closely followed by the stock market and economists throughout the world. This day marks the beginning of a critical period for the countries retail industry and will be a pivotal gauge as to the overall health of the U.S. consumer market. The stock market is riding four straight days of gains into this pivotal day, but volume in the market will likely be lower following the Thanksgiving holiday.
The U.S. housing market could use a boost and is likely to get a boost from the sharp decline with mortgage rates over the past week. The ten year bond opened at 2.95% on Friday, near historic lows. Fixed rate mortgage loans are in the mid five percent range, but could move higher quickly with market related news. Locking into near historic low mortgage rates would be a great move for any homeowner who is in an adjustable rate loan product and is concerned that their interest rates could be moving up in the upcoming years.
November 26, 2008
November 26, 2008 by admin
The stock market looks to extend a rally into the holiday shortened week. Despite a number of economic reports indicating weakness in the overall economy. Consumer spending and durable good orders both were off much higher than most economists had predicted. The silver lining in today’s economic news was that jobless claims dropped by 14,000 over the past week. The stock market has received a boost over the past week from President elect Obama, news out of Citigroup as well as a new government program aimed at purchasing mortgage backed loan securities from agency lenders.
Mortgage rates have moved lower each of the past four weeks. Homeowners who are refinancing are benefiting from the downturn of the stock market. Mortgage rates could also benefit from the new government program aimed at buying mortgage backed securities from the agency lenders. This move could help trim the margins on mortgage loans and help to ease the secondary marketplace for these loan programs. The government is also pressuring lenders to begin lending more to consumers on business, personal and mortgage loans as they are looking to jump start the economy and want proof that the banks are utilizing the funds they received from the TARP program effectively. The ten year bond opened dipped below 3% and fixed rate mortgage loans are now in the high five percent range.
November 25, 2008
November 25, 2008 by admin
The stock market looks to extend the record two day rally as the Fed announces a new plan aimed at helping to restore lending in consumer markets as well as purchasing six hundred billion dollars worth of mortgage backed securities. The Fed will directly purchase 100 billion of mortgage backed loan securities from Fannie Mae and Freddie Mac, in addition the Fed will purchase 500 billion worth of loans backed by the agency lenders. These moves are an effort to try to free up capital and restore lending to consumers and home owners.
The stock market has rallied over 9% during the last two days as the market welcomed news of the bailout of Citigroup, as well as appointments from President elect Obama. Mortgage rates have moved up this week with the positive news from the stock market. The ten year bond was trading at 3.15 with the news. Mortgage rates are hovering in the low six percent range and could move under six percent as lenders reduce their expected profit margins with the new influx of capital. Oil prices continue their decline and this is helping to boost consumer confidence as well as provide needed capital relief.
Government looks to new stimulus package to spark economy
November 24, 2008 by admin
Members of Congress are pledging a new stimulus plan to arrive in Washington the day President Elect Obama is inaugurated. There is growing sentiment that the government is likely to greatly expand on tax cuts and a stimulus packaged aimed to shore up the local and state government systems through infrastructure spending. It is also widely believed that the existing TARP program, which is now aimed at helping to unlock the secondary lending market for student loans, credit card loans, auto loans and other consumer loans is likely to grow in excess of one trillion dollars. The government has continue to add money and funds in the TARP program at banks that are feared to have toxic balance sheets such as Citigroup, hoping the improved balance sheets will make lending easier to consumers.
To date the money added to banks via the TARP program has done little to ease the credit markets or make lending more affordable. As the global markets continue to decline the government is likely to take a full hands on approach in attempting to stimulate growth and spending. The new stimulus package could be passed into law within the next sixty days and help provide a boost to the U.S. economy by the second quarter of 2009.
November 23, 2008
November 23, 2008 by admin
The stock market finished the week down almost 5%, despite a 500 point rally on Friday. Investors are moving into bonds at record rates and the ten year bond closed in on the 3% level for the first time in over ten years last week. Consumer confidence continues to be a major challenge for both the economy and stock market.
Some of the worlds largest banks, Citigroup and UBS may need to raise additional capital in the coming months as their are new concerns that the lenders corporate mortgage portfolio could have similar challenges that faced the residential market in the next 12 months. The market will study closely housing related news this week in a shortened trading week with the Thanksgiving holiday in the U.S.
Fixed rate mortgage loans are now under six percent for the fist time in the past three months. Consumers who are thinking about refinancing, can benefit from the rapid decline in the stock market. Rates and the market continue to be very volatile, so locking into a great mortgage rate could offer some long term savings.
November 20, 2008
November 20, 2008 by admin
The stock market continued an ugly deterioration of wealth as it broke firmly below 8,000 on Thursday. Globally stocks have fallen sharply as investors have moved into a panic that the global economic meltdown is going to last well into 2009. Almost all recent economic reports indicate that the economy is falling harder and faster than even some of the most pessimistic economists had predicted.
Some of the worlds largest companies including Citi, Dow Chemical, Berkshire Hathaway have seen their stock prices get beat down to historically low levels. The yield on the ten year bond eclipsed 3.15%, the lowest level of the decade. This sharp declines is good news to home owners who may be considering refinancing their mortgage as fixed rate home loans are now closing in below six percent. It’s hard to imagine the rapid decline in the stock market will do anything but slow down home buying as consumer confidence is plunging.
November 19, 2008
November 19, 2008 by admin
The consumer price index (CPI) report was released today and showed what most economists had expected a rapid slowdown with consumer prices, almost one full percent. The market is taking this in stride, and has sold off modestly following a late day rally on Tuesday. The other major report released today was the builder housing start report which indicated building permits were down almost 5% over the month of September and over 30% from 2007.
Mortgage rates continue moving lower with the news. The ten year bond is now below the 3.5% level, approaching it’s 2008 low point as more investors continue to push money into fixed bond securities. Fixed rate mortgage loans have dropped into the low six percent range with the news. The stock market remains extremely volatile as the market reacts to every piece of news.
November 17, 2008
November 17, 2008 by admin
The stock market is trying to recover from last weeks sell off of over 5%. The market took a big hit early as Citigroup the world largest employer announced they would be cutting over 50,000 jobs globally. The company has seen a dramatic decline in share price as investors grow more concerned that the firm does not have the appropriate equity to make it through the upcoming recession. The company failed earlier this year in its attempts to acquire Wachovia Bancorp and there is growing speculation that the firms CEO will be replaced.
The market did receive some positive news early in the day as a report on industrial production came in higher that expected. Mortgage rates have been somewhat flat, despite the yield on the ten year bond falling below 3.68%. Investors have grown timid of purchasing mortgage backed securities, adding a layer of additional pricing to the bonds and ultimately the interest rates offered by lenders.
Credit Cards, Auto Loans could benefit from TARP changes
November 14, 2008 by admin
Henry Paulson, the Secretary of Treasury recently announced that there would be changes to the $750 TARP package. The original package was designed and sold on the basis that it would be used to help purchase toxic mortgage debts from lenders and financial company portfolios to help free up the credit markets. The program quickly changed course as the U.S. followed the lead of many European countries who began to invest directly into banks to bring up there core capital ratios. This was considered phase one of the TARP rollout.
Phase two now appears to be directed towards consumer lending. Consumers have been directly impacted by the credit crunch as financing for auto loans, student loans, credit lines have almost all but disappeared except for borrowers with outstanding credit. The market for these consumer loans has seen the secondary marketplace disappear, resulting in limited funds available for consumers. The government believes that investing into these firms will help with more funds for student loans, credit cards, personal and small business loans, thus spurring consumers to begin purchasing and help the economy grow.
November 12, 2008
November 12, 2008 by admin
The stock market suffered another strong blow on Wednesday as Best Buy, one of the nations largest retail stores updated guidance that retail sales have slowed considerably. The stock market immediately fell almost 300 pts as investors are looking to move out of equity positions into safer investment vehicles.
The stock market has dropped sharply for the past three days as investors are growing more concerned as to the depths of the economic recession. The market was also digesting additional news on the TARP program and renewed optimism that there would be some type of bailout program started for the auto industry in the coming weeks. Mortgage rates are moving lower with the news from the stock market, but continue to move at a much slower pace down as mortgage security investors have propped up their roi requirements for some time.
