Daily Commentary by Larry Baer: A much higher-than-expected weekly initial claims
figure combined with a very benign inflation reading at the consumer level to
provide support for the prospects of steady to perhaps fractionally lower
mortgage interest rates today.
Hurricane Sandy
drove new claims for government jobless benefits to an 18 month high last
week. The number of first-time claims for benefits surged 78,000 filings
higher to a seasonally adjusted 439,000. The effects of one of the most
severe storms to ever hit the East Coast have left tens of thousands of people
temporarily out of work. Economists expect the storm could shave as much
as half a percentage point from economic growth in the last three months of
2012, but that loss should be made up early next year.
A separate report
showed consumer prices edged higher last month as the cost of shelter jumped by
the most in over four years. The October Consumer Price Indexed posted an
overall gain of 0.1% -- in-line with most analysts' projections. Core
inflation, a value excluding the more volatile food and energy components,
crept 0.2% higher. By all measures it appears inflation will stay well
within an acceptable range for several quarters to come - if so, the prospects
for steady to perhaps fractionally lower mortgage interest rates remain strong.
In yesterday's
nationally televised news conference President Obama said Republicans would
have to agree to raise taxes on the wealthy as the first step in reaching a
budget deal and averting the so called "fiscal cliff". For
their part top Republicans have indicated they have no intention of agreeing to
an escalated tax on the wealthiest Americans. The stage for political
brinkmanship is set once again and few market players expect a compromise
between the Democrats and the Republicans any time soon. As long as this
impasse prevails - a key pillar supporting the current prospects for steady to
perhaps fractionally lower mortgage interest rates will remain firmly in place.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
