Daily Commentary by Larry Baer: Mortgage investors showed little reaction to a report from the Institute of Supply Management indicating manufacturing activity in the U.S. expanded at its fastest pace in six months in December. The Institute's index of national factory activity came in above forecasts at 53.9% -- providing more evidence the economy picked up steam during the fourth quarter.
The uptick in manufacturing activity here at home contrasted sharply with the state of manufacturing in much of the rest of the world. The euro-zone's industrial sector slumped heavily into year-end and Asian factories closed out the year on a weak note. December capped the worst quarter for manufacturing in more than two years in Britain.
The "so what" factor here is simple and direct - negative events overseas eventually trickle back our way. Today's ISM manufacturing report is just one more piece of anecdotal evidence suggesting mortgage interest rates will likely remain within shouting distance of current levels for the foreseeable future. That's the good news. The bad news is that job growth will likely remain extremely soft for much of the year - a condition virtually certain to hamper home sales -- and by extension -- mortgage loan demand.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
