Mortgage Rates

Mortgage Rates Anthony Hood Equity Investment Capital Office: 949-891-0067 Email: tony@equityinvestmentcapital.com website: www.equityinvestmentcapital.com Sandy is upsetting the financial markets today, and possibly tomorrow. The NY stock exchanges are closed today with talk they may be down again tomorrow as the storm takes aim on Wall Street and NY. NY transit systems closed with concerns that the subways will flood. This morning the stock index futures traded until 9:15, now also closed. The Chicago markets still going but there are talks going on in the CME about closing also even though the storm won’t hit the city. The Securities Industry and Financial Markets Association suggested that trading end at noon New York time for the bond market. The recommendation applies to trading of government securities, mortgage- and asset-backed debt, over-the-counter investment grade and high-yield corporate bonds, municipal bonds and secondary money market trading in bankers’ acceptances, and commercial paper. SIFMA will continue to monitor conditions to determine any additional recommendations for tomorrow, according to the statement. At 8:30 Sept personal income and spending were reported; income up 0.4% a little soft with estimates of +0.6%. Personal spending was up 0.8% much better than 0.4% expected and the best levels since last February. The saving rate dropped to 3.3%, the lowest since last November, from 3.7%. Wages and salaries increased 0.3% after rising 0.1% in August. Obviously not much reaction to the data; the index futures still operating until 9:15 but there is little motivation to react to anything. That said, the US 10 yr note rate is declining this morning, at 9:00 at 1.71% -5 bp and now well back below that 200 day average that once again held the selling. Stock indexes stopped trading at 9:15 this morning; the market itself is closed. The DJIA -60, NASDAQ -14.80, S&P -4.90. Europe’s equity markets did trade, the key markets all weaker today. The only markets that will trade all day; crude and other energy markets, metals, including gold and silver. With most markets closed we don’t look for much movement in any markets, oil is most vulnerable to rallying pending the damage from the storm. This week has a lot of data to work through with the monster on Friday, the October employment data. The storm is likely to impact trading until Wednesday based on present reports from the exchanges in NY. It will depend on the amount of flooding and the NY transportation system. The improvement in the bond market and mortgage market on Friday and this morning has taken the 10 yr away from that 200 day average that had been worrisome to traders. Looking much better technically today than in the last two weeks.