Daily Commentary by Larry Baer: The only thing really driving the trend
trajectory of mortgage interest rates today and through the end of the year
will be comments and headlines on the fiscal cliff negotiations. Economic
data may cause a temporary little flutter in the market - but any substantial
shift in the current trend trajectory of mortgage interest rates will almost
certainly be tied to events surrounding the looming fiscal cliff.
A deal by Christmas,
a week before the fiscal cliff deadline, remains uncertain but not out of the
question. Be aware should a deal be reached to avert the "fiscal
cliff, and if it is anything more than a simple extension of the current
deadline, stocks will likely rally at the expense of rising mortgage interest
rates. Until/unless a deal is reached - a primary support for steady to
perhaps fractionally lower mortgage interest rates will remain in place.
The private Institute
of Supply Management
reported earlier today its Manufacturing Index for November fell from the prior
month's reading of 51.7 to 49.5. Factory conditions have been in a funk
since June. Some of November's weakness can be blamed on the effects of
Hurricane Sandy but it still remains abundantly clear this engine of economic
growth is not firing on all cylinders. Noteworthy in the detail of the
report was data indicating the employment component of the index dropped to 48.4
from October's 52.1 reading. It was the first time this
subcomponent of the index has posted a reading of less than 50 since
2009. The drop in the employment reading increased the likelihood
Friday's November headline nonfarm payroll number will match or fall below
economists' consensus forecast of 100,000 - rendering it a mortgage interest
rate neutral to slightly friendly event.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
