December 11, 2008
December 11, 2008 by admin
The stock market took a nosedive following weakness in the banking industry and a sharp increase in oil prices. The market dropped by almost two percent as investors are growing concerned that the auto loan package may not proceed as their is some resistance at the Senate level from Republicans. The market has rallied strong over the past two weeks as investors have been looking past a slew of tough economic reports and focussing on the new administration and forward growth opportunities.
The housing industry received some good news as the rate of foreclosures in the month of November slowed down by approximately 7%. This drop can be tied into local and state level iniatives to try to prevent home foreclosures. Mortgage rates are now at their lowest level in the past five years and this could also be a boost to the economy. Low mortgage rates benefit both consumers who are refinancing as well as new home buyers who can now stretch their home buying dollars further.
Auto bailout loan gains direction as government looks to save jobs
December 10, 2008 by admin
The government bridge loan to the auto industry could become a reality as early as this week. The House and Senate were working closely with the Whitehouse to work out some of the remaining details of the program that would be a lifeline to the auto industry. The 15 Billion dollar bridge loan is believed to be a necessity to get finalized this week as General Motors has threatened a potential bankruptcy that could be devastating to the economy.
GMAC announced this week that their application to become a bank holding company may not go through if they are unable to get bond holders to restructure their current debts. This move will be critical to the sucess of the worlds largest auto company, as GMAC plays a key role in providing the financing to help consumers obtain auto loans.
There is a chane the bailout bill could stall if Republicans who oppose the auto industry loan plan are able to block its passage. It would be hard to imagine a scenario where the governement would do something that could potentially be catastrophic to the job market, following last weeks announcement that in November over 500,000 jobs were lost.
December 9, 2008
December 9, 2008 by admin
The stock market sold off sharply following an impressive winning streak and news that the auto loan package could be passed by the end of the week. Pending home sales for the month of November were off less than one percent, a small sign of optimism that the housing industry is reducing inventory and home prices could stabalize in the next 12 months. Fixed mortgage rates still are hovering near historic lows as home owners are refinancing into thirty year fixed rates well below six percent.
The fed today announced a bond auction where they sold over 32 billion dollars of bons at a zero percent yield. The auction results are a clear indication that investors are still gravely concerned about preserving capital as the appetite for risk is almost completely gone. The stock market has faired well in the month of December, however there are a number of key economic reports that could move the market over the next two weeks.
December 8, 2008
December 8, 2008 by admin
Mortgage rates have moved higher over the past week following a lead from the stock market. The stock market jumped in early trading as expectations that the government could be moving forward with a bailout for the auto industry provided optimism for the economy and slowing down future job losses. The ten year bond opened the day at 2.72%. still hovering near 2008 lows. Fixed mortgage rates have moved up over the past week as the spread for mortgage backed loan securities is again growing wider.
President elect Obama has promised a broad and aggressive plan to help the ailing economy including proposals to spend money on infrastructure. The plan could reach 1 trillion dollars in total as he works agressively to pull the country out of it’s deepest recession since the great depression. Global stocks have also rallied on the news of the U.S. spending plan.
December 5, 2008
December 5, 2008 by admin
The stock market dropped sharply following a report on the U.S. employment sector. The economy took another blow when the jobs report posted job losses in excess of 500,000 jobs for the month of November. The economy is teetering on the brink of a complete meltdown as the stock market continues to lose ground with falling consumer confidence.
Home foreclosures continue to skyrocket as the economy turns sour. The rate of new foreclosures hit a record pace last month and there is little doubt this figure will continue to grow larger as the economy goes sideways. Fixed rate mortgage loans are still trading in the low five percent range as home owners look to benefit from moves by the fed last week to bring liquidity to the secondary marketplace. The market still is not truly benefitting from the rapid change to the ten year bond price, which is now well below 2.7%. Long term fixed rate mortgage loans could continue to benefit from the uncertainty in the economy, but there are no guarantees that the rates will last for an extended period of time.
Government may look to further action to bring mortgage rates down to historic lows
December 4, 2008 by admin
The government is looking to take further action to stabalize the housing market and curtail the rate of home foreclosures. The economic downturn that the country has experienced over the last 12 months can be directly tied into the fall out in the housing market. Home sales have continued to decline as consumers have lost confidence in the market and economy.
The Fed recently moved to purchase over 700 billion of mortgage backed loan securities, which led to a sharp decline with mortgage rates to 2008 low levels. This move has spurred a wave of new home refinancing, but the impact on spurring home sales is yet to be determined. The lower rates will help make house payments more affordable for consumers who are looking for a reason to purchase a new home.
The new proposals include a move by the government to create a new marketplace for mortgage backed loan securities that would have the possibilty to lower rates down to 4.5%. This move would certainly help to bring house payments lower, which certainly would help provide some incentives for the housing market. This would help to restore some incentives for home buying, but will need to be combined with further stimulus that could come in the form of rebates for purchasing homes. The issue of home foreclosures will need to be addressed further with lenders as the incentive for lower rates does not address home owners who are currently upside down on their home mortgages and do not qualify to refinance.
December 3, 2008
December 3, 2008 by admin
The stock market continues to have large daily swings up and down and Wednesday looks like another roller coaster day of trading. Investors continue to receive mixed messages regarding the health of the economy. The ADP jobs report showed a 250,000 loss of jobs for the month of November, in line with most economists expectations. The market appears to be looking past this news and found some good news in the productivity report released today which showed a strong improvement with productivity for the month of November.
Despite a nearly 300 pt increase in trading on Tuesday, the stock market was still down almost 400 pts for the week. The market will be trading anxiously ahead of Friday’s jobs report, which could set the tone for the long term rebound of the recession. Mortgage rates continue to be a major focus and lenders continue to work to improve pricing and rates for consumers following the Fed’s capital injection into the secondary market. Fixed mortgage rates are in the low five percent range and could move lower if the market continues to ease up from secondary lenders.
December 1, 2008
December 1, 2008 by admin
The stock market started the month of December on a down note. The market appears to be selling off aggressively following last weeks holiday rally. The market is digesting global news of economic challenges in Asia and Australia as well as local news that factory orders reached a twenty year low. This follows up a nervous weekend following the Black Friday, a closely watched day to monitor retail traffic.
Mortgage rates started the day near 2008 lows. The ten year bond continues to move lower as investors are looking to the security of bonds. Mortgage rates are now well positioned under six percent following the rapid decline started by last weeks Fed announcement of their direct purchase of mortgage bonds. There are a number of key economic reports due out this week that could move the market, including Friday’s jobs report which could have a large impact on stock prices and mortgage rates.