Daily Commentary by Larry Baer: Uncle Sam will sell $24 billion of ten-year
notes today, followed by $16 billion of 30-year bonds on Thursday. Each
auction will conclude at 1:00 p.m. and I will post the result on my website as
soon as possible once the final gavel falls.
Nothing in President
Obama's State of the Union address suggested the White House and Congress are
well on their way to avoiding the automatic spending cuts scheduled to be
triggered on March 1st. So as expected, selling pressure in
the stock markets is starting to intensify - a condition almost sure to create
a little downward tug on mortgage interest rates. The stronger the
selling in the stock markets becomes -- the more supportive it will prove to be
for the prospects of steady to perhaps fractionally lower mortgage interest
rates.
The Commerce
Department reported earlier this morning that Retail Sales barely registered a
pulse in January -- posting an overall gain of 0.1% and 0.2% excluding the
volatile auto component. Most economists believe the impact of higher
social security taxes and surging gasoline prices combined to sharply reduce
consumer spending.
Mortgage activity
lost ground during the week ending February 8th, as the Mortgage
Bankers of America said their weekly mortgage application survey showed overall
loan demand fell by 6.4%. Request for purchase money fell by 9.5% while
refinance demand was lower by 5.5%. On a four-week moving average basis,
refinance activity has advanced by nearly 14% over the past month, but only
4.6% from a year earlier. Meanwhile, the purchase index has risen by 11%
over the past month and 17% from this time last year. During the last
week refinance applications accounted for 78% of all applications and 73% of
the prospective loan volume.
The contract rate
for 30-year fixed-rate conforming mortgages rose by 2 basis points to
3.75%. The interest rate is 14 basis-points higher from four-weeks ago
but 33 basis-points lower than the year-ago mark.
THE
MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
