Daily Commentary by Larry Baer: The
number of Americans filing new claims for jobless benefits fell by 14,000 last
week - the biggest decline in two months.
This week-over-week improvement in the weekly jobless claims data fell
outside of the survey period for tomorrow morning's much more important June
Nonfarm Payroll report.
In a separate report the independent
Institute of Supply Management said its Service Sector Index, a measure of
activity covering the broadest section of our economy, dropped to a softer than
expected reading of 52.1% -- its lowest mark since January 2010.
Today's two reports did nothing but reinforce
the broad held view among mortgage investors that the pace of economic growth
continues to be anemic - a condition that provides strong foundational support
for the prospects of steady to perhaps fractionally lower mortgage interest
rates ahead.
Your current rate sheets almost fully reflect
mortgage investors' expectation that tomorrow morning's 8:30 a.m. ET release of
the June Nonfarm Payroll figure will show the economy created something in the
neighborhood of an almost trivial 90,000 new jobs last month. The national jobless rate is expected to
remain unchanged at 8.2%. Only in the
highly unlikely event June Nonfarm Payrolls were to exceed 125,000 and/or the
national jobless rate posts a reading of 8.0% or less will mortgage investor's
likely respond by pushing interest rates notably higher.
FYI: The
Mortgage Bankers of America released their weekly Mortgage Application Survey
earlier today. According to the MBA,
overall loan application traffic fell 6.7% during the week ending June 29th. Refinance requests were 8.4% lower while
purchase money loan demand gained 0.6% on a week-over-week basis.
Refinance applications accounted for 78% of
all applications and 75.7% of the perspective loan volume. The contract rate for 30-year conforming
mortgages finished at 3.98%, down 2 basis-points from a week ago, down 1
basis-point from the month ago level, and down 83 basis-points from one-year
ago.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
