Daily Commentary by Larry Baer: Mortgage interest rates are steady to
fractionally lower this morning on worries about protracted budget talks in Washington
and growing military tensions between Israel
and Palestine.
President Obama and
ranking Democrats remain solidly entrenched in their position that a tax-hike
on the wealthy is the first and most crucial 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 battle lines in the war of political
brinkmanship have been drawn 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.
Trading action for
the balance of the year will likely be headline driven rather than trend
driven. Any signs the president and Congress have reached a viable and
sustainable accord on deficit reductions and tax increases -- and/or a major
reduction in tensions in the Middle East is
achieved -- will tend to nudge mortgage interest rates higher. While each
of these outcomes are individually and collectively possible between now and
the end of the year - they are about as probable as Justin Bieber being invited
to sing the national anthem at the Noon Day Lion's club meeting in Amarillo,
Texas.
Looking ahead to
next week's holiday shortened trading session Monday's Existing Home Sales
report will occupy the primary spot on an otherwise very thin economic
calendar. The mortgage market will be closed on Thursday for the
Thanksgiving Holiday and it also will close early at 2:00 p.m. ET on Friday.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
