Mid-Day Recap: Labor Reports Send Markets into Freefall

2009-07-02T15:23:24Z

The pace of losses in the labor market had been moderating for four months but in June nearly half a million jobs vanished from the economy, in contract to widespread expectations. The Bureau of Labor Statistics said 467,000 jobs were lost, pushing the unemployment rate to 9.5%, the highest in 26 years. “The heavy loss of jobs in June is a warning that the road to recovery will be bumpy, but doesn't yet indicate that we have gone off the track” . . . ...(read more)

The Day Ahead: Markets Hesitant Ahead of Employment Data

2009-07-02T12:16:48Z

Markets are edging lower ahead of the 8:30 release of Nonfarm Payrolls. A lot is hanging on this report as many forecasts for the economy are dependent on the direction of the labor market. Many look for signs of stabilization after last month’s downside surprise, but signs of a recovery have been far from evident in the weekly Jobless Claims numbers or the ADP private employment report. The consensus looks for 325,000 jobs to have vanished this month, with forecasts ranging between 225,000 and 435,00...(read more)

HARP Guidelines Allow for 125% LTV. Originators Still Skeptical

2009-07-01T21:52:00Z

The Home Affordable Refinance Program was designed to assist borrowers who have demonstrated an acceptable payment history on their existing Fannie Mae or Freddie Mac owned mortgage loan. Unfortunately due to rising unemployment levels and increasing foreclosure rates, demand for housing has weakened and property values have continued to decline, which has blocked many borrowers from utilizing HARP....(read more)

Mortgage Performance: Fighting Rising Rate of Foreclosures with Loan Modifications

2009-07-01T17:26:00Z

A joint report from the OCC and OTS, which includes 64% of all outstanding mortgages, shows that instances of delinquency continued to increase in the second quarter. Particularly of note is the increasing growth rate of delinquencies among loans backed by prime borrowers. In general, the rate of increase in delinquencies slowed somewhat, but the report notes this may be partially due to seasonal effects. Unequivocally positive however, was the dramatic increase in the number of loan modifications...(read more)

Mixed Data for Real Estate, ISM Index Improves

2009-07-01T14:53:00Z

Three data releases at 10:00 failed to sing in tune with each other. A key indicator of output showed some improvement but is still contracting overall, and while contracts for home purchases are on the rise, spending on the construction of new homes it at historic lows....(read more)

Mortgage Applications Nosedive in Late June

2009-07-01T12:49:00Z

Demand for mortgage loans simply plummeted in the final week of June, even as mortgage rates once again moderated, according to a weekly industry index. The Mortgage Bankers Association said the Market Composite Index, a measure of loan application volume, fell 18.9% to 444.8 in the week ending June 26. The decline was led by a 30.0% drop in refinance-related loan applications. It seems that homeowners are less than enamored with mortgage rates, which were at multi-decade lows between March and April...(read more)

The Day Ahead: Markets Optimistic Ahead of Big Day

2009-07-01T12:11:02Z

The first trading session of the third quarter is a heavy one for markets. Just one day ahead of the June employment figures, markets will get the closely watched ISM Manufacturing Index, the Pending Home Sales Index, the ADP private employment report, and more. Prior to any of the data, the U.S. dollar is looking weaker, but equities are poised to recover from the Tuesday sell-off, and WTI crude is up $1.50 to just under $72 per barrel. “Today brings a raft of potential market-moving reports...(read more)

Fannie Mae Expands Portfolio, Delinquencies Rising

2009-06-30T14:02:00Z

Fannie Mae, the mortgage goliath taken under government control last September, yesterday announced that its portfolio expanded by an annual rate of 35.1% in May, marking a stark contrast to the 19.2% decline in April. In its summary of monthly highlights, the agency said it provided nearly $72 billion of liquidity to the market, mostly in the form of Mortgage-Backed Securities ($67.7 billion). Fannie also securitized more than $61 billion of whole loans within their investment portfolio. Fannie...(read more)

Case-Shiller Says Pace of Home Price Declines Slowed in April

2009-06-30T13:52:00Z

Contrary to expectations, the rapid decline of home prices showed signs of stabilization in April, according to the Case-Shiller Home Price Index, the most influential recorder of prices. The 10-city composite index, which looks at ten major metropolitan areas across the nation, showed an annual price decline of 18.0% in April, compared with an -18.7% print in March. The market consensus prior to release was 18.8%. “For the past three months, the 10-City and 20-City Composites have recorded...(read more)

The Week Ahead: Holiday Shortened Calendar

2009-06-29T12:17:14Z

The transition from June to July offers a packed schedule for investors. No data comes out Monday and Friday is a holiday, but the three days in between present key data and numerous speeches covering all fronts of the economy. The S&P 500 has gained 43% since its low in early March, and while some are calling a plateau inevitable, others believe positive data could convince investors that genuine recovery is on the horizon. The biggest release this week will be the Employment figures on Thursday...(read more)

Mid-Morning Recap: Stocks Fail to Rise Despite Gains in Income, Sentiment

2009-06-26T14:58:01Z

Despite reports of higher income and improving consumer confidence, markets are off to a rough start on Friday morning with all three indexes in the red an hour into the trading session. Leading the decline is the 0.36% drop in the Dow to 8442, while the S&P 500 has edged down 0.29% to 917, and the Nasdaq is just 0.5% below par at 1829. An hour before the opening bell, personal income levels advanced far more than forecasts in May, helping consumption see its first gain in three months. Income...(read more)

New Home Sales Stagnate. April Revisions Mitigate May Decline

2009-06-24T14:52:23Z

News was mixed for the real estate market this morning. Sales of new single-family homes fell 0.6% in May, in contrast to expectations of a 2.3% increase. By itself, that would be awful news, but revisions to April told the opposite story: the original 0.3% advance was revised way up to a 2.7% gain. The annual pace of new home sales is now 342,000, a whopping 32.8% below the rate in May 2008. Despite the revisions for April, that figure is quite a bit below forecasts for an annual rate of of 365...(read more)

Mortgage Applications Rebound as Rates Stabilize

2009-06-24T12:06:00Z

Loan applications for mortgages increased last week for the first time in a month, as average rates for a 30-year fixed rate mortgage edged downwards, a weekly report said Wednesday. Demand for applications advanced 6.6% in the week ending June 19, according to the Mortgage Bankers Association, who have been conducting the survey since 1990. From the MBA Press Release: "The Market Composite Index, a measure of mortgage loan application volume, was 548.2, an increase of 6.6 percent on a seasonally...(read more)

GSE Loan Modifications Increase. Prime Borrowers Falling Further Behind

2009-06-23T21:40:00Z

The Federal Housing Finance Agency (FHFA) today released first quarter foreclosure prevention data for Fannie Mae and Freddie Mac. Total foreclosure prevention actions (including loan modifications) totaled 86,600, 20 percent more than the previous quarter and more than double the amount of first quarter 2008. Of the nearly 87,000 actions, 90 percent resulted in home retention, which is consistent with 2008 data, while the remaining 10% resulted in mostly short sales and deeds in lieu of foreclosure...(read more)

Mid-Morning Recap: Sell-Off Extends into Tuesday

2009-06-23T15:33:56Z

Stocks have been extremely volatile Tuesday morning, and after opening higher all indexes are negative 90 minutes into the trading session. The Dow is leading the decline with a 0.53% drop to 8294, while the Nasdaq is 0.50% lower at 1757, and the S&P is down 0.29% at 890. This week has erased any year-to-date gains for the S&P, which is now down 1.47% since the start of the year. The increased risk in equities has led investors into the safety of government bonds: the 10-year yield is down...(read more)

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