Daily Market Watch for 11-26-08

A Thanksgiving-like helping of economic news was served this morning and as a result, Mortgage Bonds are a trading a little higher. Durable orders were much lower than expected, while initial jobless claims were actually better than expected.

Inflation as measured by the Core PCE was tamer than estimates. Chicago PMI fell and Consumer Sentiment is still in the dumps. New Home Sales dropped to the lowest levels since 1991 but inventories have fallen 25.7%, the biggest drop since the government began tracking the data in 1963.

Yesterday's Fed announcement that it will be purchasing Mortgage Backed Securities from Fannie Mae, Freddie Mac and Ginnie Mae should help lower home loan rates over time. For today I will recommend to Float.

Daily Market Watch for 11-25-08

The mortgage industry received some big news this morning that will likely overshadow the Gross Domestic Product and Consumer Confidence reports today.

One of the biggest news items is the Fed's announcement that it will purchase $600 Billion worth of Mortgage-Backed Securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae. This should help increase the availability of credit, while also lowering fixed mortgage rates. In addition, the Fed will allocate $200 Billion to create liquidity in the auto, student, and small business loan markets.

News of these plans is already helping push mortgage rates lower, as Mortgage Bonds have had a strong rally and appear headed for their price highs of 2008. For now, I recommend floating to see how much more the pricing improves.

Daily Market Watch for 11-19-08

For the 11th straight day Mortgage Bonds have touched the 200-day Moving Average. After a higher open, prices have bounced around and are now trading just above this important level.

On the news front, Overall Consumer Price Index fell a record -1.0%, thanks to an 8.6% decline in energy prices. Housing Starts also fell 4.5% in October. And yesterday, Mortgage Bonds bounced higher after news that giant hedge fund Paulson & Co. has started buying beaten-up Mortgage Bonds in its Advantage Plus fund.

The 200-day Moving Average is an amazing level to watch. Mortgage Bonds dipped below this level earlier today and now have settled right above this important floor. I recommend carefully floating for now, as we watch to see if Mortgage Bonds can build on the recent positive momentum....More

Daily Market Watch for 11-17-08

Bad news continues to infiltrate the market today, as Japan becomes the latest economy to fall into a recession and fears of a worldwide recession have forced Stocks around the globe lower.

In other news, banking giant Citigroup announced it will lay off 50,000 people on top of the 23,000 jobs they cut earlier this year. Additionally, Industrial Production showed a 1.3% rise; however, September's was revised lower to -3.7%--making it the largest monthly drop in industrial production in over 60 years.

Currently, Mortgage Bonds are near unchanged levels and linger near the 200-day Moving Average for the 9th consecutive trading session. For now, I recommend floating, but be ready to lock if pricing drifts down...more CLICK HERE

Daily Market Watch for 11-14-08

Mortgage Bonds are higher this morning after Retail Sales numbers fell for the fourth straight month and plunged to their worst level since record keeping began in 1992. This is important information because it indicates a bad outlook for the retail industry overall and comes as we head into what looks to be the worst holiday shopping season in a long, long time.

In other news, Fed Chairman Ben Bernanke spoke in Germany today, indicating that central bankers worldwide are prepared to take additional actions to unfreeze global credit markets.

Earlier this morning, Bonds opened above the 200-Day Moving Average, but have since dipped back below this important level. For now, I recommend floating as we watch to see how Bonds react to the market news. However, if the situation changes, I will keep you posted.

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Daily Market Watch for 11-13-08

Bonds are facing some selling pressure this morning, as Stocks are attempting to stabilize and move higher after three days of hard losses. The modest rally in Stocks is a bit puzzling when you consider the continuing barrage of bad news, including lower future earnings guidance from Wal-Mart and Intel as well as the worst initial unemployment claims data since 2001.

In other news, a $10 Billon auction in 30-year Treasury Bonds will hit the market at 1 pm Eastern Time. If the auction is not well embraced, Bonds could face additional selling pressure.

Currently, both Stocks and Bonds continue to trade near important support levels. I recommend floating for now, but I will let you know if Bonds fall below support and a change in course is needed...more

Daily Market Watch for 11-12-08

Mortgage Bonds are trading higher so far this morning, in reaction to continued weakness in the Stock market.

Adding to the negative sentiment in Stocks this morning are the poor earnings outlooks for Best Buy and Macy’s. These negative outlooks come right on the heels of Circuit City closing 150 stores. Suffice it to say, this holiday season doesn’t look good for retailers.

There are no economic reports due out today, but at 1 pm Eastern Time the Treasury is set to auction off $20B in 10-Year Notes. If this auction is not well received, it could temper the current rally in Bonds. For now, I recommend floating as I continue to monitor the direction of Stocks and the reaction of Bond prices.

For a detailed report CLICK HERE