MND NewsWire

The Day Ahead: Empty Econ Calendar. Stocks Set to Slide at Open

Patrick McGee — Fri, 20 Nov 2009 13:10:34 GMT

In line with weak global markets, US equities are looking to open lower this morning. Two hours before the bell sounds S&P 500 futures are down 8.2 points at 1,086 and the Dow is off 68 points to 10,259. Following the trend, commodity prices are also weaker. WTI Crude oil is trading 52 cents lower at $77.53 per barrel and Spot Gold is down $4.95 to $1139.65. “Risk is still off this morning, with equity markets weighed down by a disappointing earnings report from Dell,” noted Robert Kavcic from BMO Capital Markets. The computer maker yesterday reported net income of $337 million in the third quarter, or 17 cents per share, well below Q308 income of $727 million, or 37 cents per share. Key Events? Some days are slow and this is one of them. No economic data from the US is scheduled...(read more)

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Fed MBS Purchases Focus on New Loan Production

Adam Quinones — Thu, 19 Nov 2009 21:34:00 GMT

The Federal Reserve today reported on their weekly purchases of agency mortgage-backed securities (MBS). In the five trading days between November 12 and November 18, the Federal Reserve purchased a total of $17.23 billion agency MBS. In those five days the Federal Reserve sold $1.23 billion agency MBS (dollar rolls) bringing net purchases to a total of $16.00 billion, $2.5 more than the previous, holiday shortened week. The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and...(read more)

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MBA Reports Record Delinquency Rates. Will Get Worse Before Improving

Jann Swanson — Thu, 19 Nov 2009 21:06:00 GMT

Mortgage loan delinquencies continued to rise in the third quarter according to information released on Thursday by the Mortgage Bankers Association (MBA). Loans on one-to-four unit family homes that were delinquent, but not yet in foreclosure, reached 9.64 percent of all loans during the third quarter. This is an increase of 40 basis points over the second quarter of 2009, breaking the all time record set at that time . The rate is 265 basis points higher than the 6.99 percent delinquency rate reported one year ago. 3.57 percent of all loans were 30 days past due compared to 3.68 percent last quarter and 3.39 percent one year ago. 1.67 percent of all loans were 60 days delinquent compared to 1.68 percent and 1.40 percent on year ago Seriously delinquent loans - those over 90 days or in foreclosure...(read more)

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Freddie Mac: Record Low 15 Year Fixed Rate Mortgage

Jann Swanson — Thu, 19 Nov 2009 18:00:00 GMT

The interest rate on 15-year fixed-rate mortgages (FRM) set another record low this week, according to information released this morning by Freddie Mac. The Primary Mortgage Market Survey for the week ended November 19 showed rates down across the board, with the 15 year FRM averaging 4.32 percent, the lowest rate since Freddie Mac began tracking the mortgage in 1991. Last week the 15-year averaged 4.36 percent. Fees and points were unchanged at 0.6 point. The 30-year FRM averaged 4.83 percent with 0.7 point, down from the average of 4.91 percent also with 0.7 point a week earlier. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.25 percent, a decrease of 4 basis points. Fees and points were unchanged at 0.6 point. One-year Treasury-indexed ARMs had an average rate...(read more)

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The Day Ahead: Dollar Firms, Equities Retreat Before Jobless Claims, LEI, Philly Fed

Patrick McGee — Thu, 19 Nov 2009 13:19:17 GMT

New 13-month peaks early in the week and now . . .hesitation. Ninety minutes before the opening bell, S&P 500 futures are off 10 points to 1,098 and Dow futures are 66 points lower at 10,338. With equities taking a dip, other assets considered risky are following suit. WTI Crude is trading 70 cents lower at $78.88 per barrel and Spot Gold is $10.87 lower at $1134.63. As President Obama warns of accumulating too much debt, he is also tapping into unused portions of the TARP funds, sending mixed messages to the market. Meanwhile, investors are concerned about the US housing market, trade relations with China, and the broad decline of the US dollar. Still, the dollar is maintaining its safe-haven status and firming against multiple currencies this morning. BMO’s Sal Guatieri notes that...(read more)

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Housing Starts Fall. Single Family Building Permits On Hold

Adam Quinones — Wed, 18 Nov 2009 16:25:00 GMT

The Commerce Department released October New Residential Construction: Building Permits, Housing Starts, and Housing Completions data this morning. Housing Starts data estimates how much new residential real estate construction occurred in the previous month. New construction means digging has begun. Adding rooms or renovating old ones does not count, the builder must be constructing a new home (can be on old foundation if re-building). Although the report offers up single family housing, 2-4 unit housing, and 5 unit and above housing data, single family housing is by far the most important as it accounts for the majority of total home building. Building Permits data provides an estimate on the number of homes planning on being built. It tracks how much future construction activity we can expect...(read more)

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Refinance Applications Down 1.4%. Purchase Index at 12 Year Low

Adam Quinones — Wed, 18 Nov 2009 15:09:00 GMT

The Mortgage Bankers Association today released the Weekly Survey on Mortgage Application Activity for the week ending November 13, 2009. Housing is a key component of economic forecasts, thus real estate surveys and housing data are closely scrutinized by policy makers. The Mortgage Banker's application survey covers over 50% of all US residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a look into consumer demand for mortgage loans. A rising trend of mortgage applications indicates home buying interest is increasing, a positive for the housing industry and economy as a whole. Furthermore, in a low mortgage rate environment, a trend of increased refinance applications implies consumers are seeking out a lower monthly...(read more)

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The Day Ahead: Housing Starts and Inflation Data

Patrick McGee — Wed, 18 Nov 2009 13:00:06 GMT

Sitting comfortably at 13-month highs, equities are beginning the day moving sideways ahead of data on inflation and the housing market. The Dow looks to open 21 points higher at 10,419 and the S&P 500 is 2.5 points up at 1,110. The dollar index index is down 0.50% to 75.0, 37 cents below Tuesday’s close. Its weakness continues to boost commodity prices as foreign investors find their prices attractive. Oil is once again past the $80 mark, while gold prices are trading at $1,147.40 per ounce, a new record high. Key Events Today: 8:30 ― The Consumer Price Index is expected to remain broadly unchanged in most categories , but higher energy prices should should push the headline up 0.2% overall. The core CPI, which excludes food and energy prices, is expected to inch up 0.1%. “The...(read more)

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Administration Announces Financial Fraud Unit

Jann Swanson — Tue, 17 Nov 2009 21:36:00 GMT

Corporations and individuals doing business in financial marketplaces will be subject to increased scrutiny by a new task force on financial fraud announced on Tuesday. Attorney General Eric Holder revealed creation of the interagency group to crack down on financial fraud at a press conference on Tuesday. The task force has been charged with investigating and prosecuting financial crimes connected to the recent financial crisis and with taking steps to stop fraud on an ongoing basis. The initiative was created under an executive order signed by President Barack Obama. Holder stated, "The Task Force is designed to strengthen our collective efforts -- in conjunction with our federal, state, and local partners -- to investigate and prosecute significant financial crimes relating to the current...(read more)

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Home Builders Expecting Increased Activity in 2010. Appraisal Issues a Concern

Adam Quinones — Tue, 17 Nov 2009 18:29:00 GMT

The National Association of Home Builders today reported that homebuilder sentiment was unchanged in November. A reading above 50 indicates builders view sales conditions as favorable whereas a read below 50 implies builders believe sales conditions to be poor. The November Housing Market Index was unchanged from October's downwardly revised level of 17. The component gauging current sales conditions and the component gauging traffic of prospective buyers also remained unchanged, at 17 and 13, respectively. The component gauging sales expectations for the next six months did however improve, moving up two points, to 28. As you can see from the chart below, home builder sentiment has been improving off record low levels. Regionally, home builder sentiment in the South was unchanged at 17...(read more)

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TransUnion: Mortgage Delinquencies Still On Rise, But at Slower Pace

Jann Swanson — Tue, 17 Nov 2009 18:17:41 GMT

Delinquency rates throughout the United States continued to increase during the third quarter of 2009. The good news is that, for the third consecutive quarter that increase has slowed. This information is contained in a report released today by TransUnion.com analyzing trends in the mortgage industry and the impact of those trends on the consumer. The company, one of the three major credit reporting agencies in the country, distilled the information from 27 million individual credit files, a universe that represents approximately 10 percent of all credit-active U.S. Consumers. The national rate for delinquencies of 60 days or more hit an all time high of 6.25 percent during the third quarter. This was an increase of 7.57 percent over the 5.81 percent national rate during the second quarter...(read more)

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The Day Ahead: PPI, Industrial Production, TIC Flows, Housing Confidence

Patrick McGee — Tue, 17 Nov 2009 13:08:28 GMT

Equity markets are looking down before the bell but the losses are modest compared to the Monday rally. S&P 500 futures are off 2.1 points to 1,104 and Dow future have shed 5 points to 10,363. On Monday investors pushed the S&P up nearly 16 points, or 1.45%, to a new 13-month high. The Dow saw a 1.33% gain to 10,407. Meanwhile, emerging from a 15-month low the dollar index is up 0.4% to 75.20 a day after Fed chairman Ben Bernanke said the Fed would “help ensure that the dollar is strong.” In line with equities, WTI Crude oil is off 34 cents to $78.56 per barrel, and Spot Gold is trading $8.26 lower at $1,131. In earnings, Home Depot said sales fell 8% in the third quarter. The CEO said “there is still a great deal of pressure in the housing and home improvement markets...(read more)

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Recap: Bernanke Discusses the Economic and Policy Outlook

Adam Quinones — Mon, 16 Nov 2009 22:14:07 GMT

Federal Reserve Chairman Ben Bernanke today spoke at the Economic Club of New York. The topic of his speech was the Outlook for the Economy and Policy . While nothing groundbreaking was said, I do want to recap his comments and point out a few observations. Bernanke opened with the usual mixed message, progress has been made but several considerable challenges lie ahead... "financial conditions are considerably better than they were then, but significant economic challenges remain. The flow of credit remains constrained, economic activity weak, and unemployment much too high. Future setbacks are possible." I don't like making Ben look like a politician, but at this point one of the biggest factors affecting his outlook and the market's perception of our economic well-being...(read more)

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The Week Ahead: Data Storm Rains on Markets

Patrick McGee — Mon, 16 Nov 2009 12:59:49 GMT

The week begins with a bang but ends with a whimper. A storm of data hits markets on Monday with retail sales an hour before the opening bell, plus the first look at November manufacturing and business inventories. To top off the day, Fed chairman Ben Bernanke gives a talk during the lunch hour a little after dual Treasury auctions. Later in the week markets will be looking at inflation indexes, housing construction data, the usual weekly labor report, and leading indicators. Friday ends the week with no data at all. The week is sure to be a busy one. Even before the opening bell sentiment is high after the Japanese economy climbed a healthy annualized rate of 4.8% in the third quarter, about two percentage points better than expected incline due to robust consumer spending and improving exports...(read more)

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The Day Ahead: Risk Returns after Profit-Taking Thursday

Patrick McGee — Fri, 13 Nov 2009 13:10:54 GMT

With the Dow climbing for six consecutive days and breaking fresh 13-month highs, the 0.91% sell-off yesterday was prompted more by timely profit-taking rather than plunging sentiment. After a one-day break, investors are already back in buy-mode this morning, as all three indexes are looking modestly higher. The question will be whether that confidence can last the morning. The trade balance is a never-too-pretty reminder of the nation’s growing debt, and consumer sentiment is unlikely to surge with the unemployment rate hitting double-digits for the first time in 26 years just two weeks ago. Outside the US, the main economic news this morning is that the Eurozone has technically exited the recession with third-quarter GDP inching 0.4%. Annual GDP is down 4.1% but that’s an improvement...(read more)

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