Wednesday, July 8, 2009

Mortgage rates Charlottesville

The Second Quarter earnings season starts today, with all eyes on aluminum giant Alcoa. Although Alcoa is expected to post its third consecutive quarterly loss, Traders will be listening for Alcoa's outlook for the next few quarters as a harbinger of a potential economic recovery.
Looking at today, Bonds should continue to take their direction from Stocks, as well as the Treasury's auction of $19 Billion worth of 10-Year Notes.
Leonard Winslow, Dominion Trust Mortgage
434-760-2580 (cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow
Licensed by the Virginia State Corporation Commission. License #: MC-5112.
Posted by Rob Alley at 7:57 AM
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2 comments:

Rob Alley said...

Tuesday's bond market has opened relatively flat with no relevant economic news on the agenda today. The stock markets are showing losses with the Dow down 78 points and the Nasdaq down 15 points. The bond market is currently up 2/32, but we will see an improvement in this morning's mortgage rates of approximately .250 of a discount point due to strength late yesterday.

There is no relevant economic news scheduled for release again today. The weakness in stocks will probably keep bonds from turning sour today. We have seen some improvements in mortgage rates over the past couple of days, but there is question as to whether or not they can hold. It currently appears that they may for the time being, but we know that mortgage rates will rise much quicker than they improve. Accordingly, if still floating an interest rate please be very cautious over the next several days. At least until we get the results of Wednesday's Treasury auction and a couple of the major earnings releases behind us.

There are only two monthly economic reports being posted this week and they both come Friday. There are also two relevant Treasury auctions left that may influence mortgage rates. 10-year Notes will be sold tomorrow and 30-year Bonds Thursday. These sales can influence market trading in bonds and possibly affect mortgage rates. If the sales are met with a strong demand from investors, particularly Wednesday's sale, we should see afternoon improvements in bonds that could lead to downward revisions to mortgage rates. However, if concerns over the amount of debt being sold keeps buyers on the sidelines, we may see bonds fall after results are posted at 1:00 PM ET and mortgage rates move higher during afternoon trading tomorrow or Thursday.

Tomorrow kicks off the earnings season when Alcoa posts their quarterly results. Market participants are anxiously waiting for these results to see just how hard the weak economy is affecting earnings. Just as important as this past quarter's results are their forward-looking estimates. If revenue, earnings and projections from the big-named companies exceed expectations, stocks will likely rally, making bonds less appealing to investors. But if results are weaker than expected, indicating that the economy is still stifling earnings, bonds will be more attractive to investors as stocks slide. This could help boost bond prices and lead to lower mortgage rates.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

July 8, 2009 at 8:36 AM
Rob Alley said...

Charlottesville Mortgage Rate Comment 7/8/2009
Wednesday's bond market has opened flat again as investors prepare for the events of the next couple of days. The stock markets are showing minor gains after yesterday's afternoon sell-off. The Dow is currently up 28 points while the Nasdaq is nearly unchanged. The bond market is currently up 3/32, which will likely keep this morning's mortgage rates near yesterday's morning rates.

There is no relevant economic data scheduled for release yet again today. But we do have two issues that are quite relevant to bond trading and mortgage rates. The first is today's 10-year Treasury Note auction. Results of the sale will be posted at 1:00 PM ET. If the sale was met with a strong demand from investors, particularly international buyers, we could see bonds rally during afternoon trading. The flip side is that a weak demand would indicate a waning interest in U.S. securities, making current bonds less appealing to investors. That likely would drive bond prices lower and mortgage rates higher this afternoon.

The second event is the release of quarterly earnings from Dow component Alcoa after the stock markets close today. They traditionally are the first major company to release earnings each quarter. If their results and forecasts fall short of expectations, we can expect to see stocks fall during after-hours trading and early tomorrow morning. The stock weakness could drive bonds higher as traders seek safe-haven in bonds. But if they beat forecasts, we will probably see stocks move higher, drawing funds from bonds and leading to higher mortgage rates in the morning.

The only semi-relevant economic data scheduled for release tomorrow morning are weekly unemployment figures from the Labor Department. They are expected to say that 600,000 new claims for unemployment benefits were filed last week. This would be a decline from the previous week's total. However, this data usually has a limited impact on bo nd trading and mortgage rates since it gives us only a week's worth of new claims. With no other relevant economic data on the calendar tomorrow and little news already posted this week, we may see a slightly stronger than usual reaction to the results. But I don't see this data being a market mover tomorrow or significantly affecting mortgage rates.

Also tomorrow is the Treasury's sale of 30-year Bonds. This sale is less likely to affect mortgage rates than today's 10-year Note sale does, but that doesn't mean we can ignore its results. The same principals apply as today's sale?a strong demand is favorable for bonds while a lackluster interest could lead to bond weakness and potential increases to mortgage rates.

July 8, 2009 at 9:08 AM

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