The Mortgage Man

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Tuesday June 24, 2008

Dow Chemical bumps prices 25% across the board.

There are a few items in the news today that are affecting the markets.  Dow Chemical has decided to raise prices for their products by 25% across the board.  This is due in large part to the continued rise in energy costs, among other things.

Mortgage bonds are up slightly this morning as money from the stock market is filtered over to bonds on news that shipping giant UPS has issued a profit warning for the quarter.  This of course means that fewer people are shipping, and the assumption would be that fewer goods are being sold because of this warning, leading to a rush for traders to look for less volitility in bonds.

While this by itself would be good news for bonds and mortgage rates, the price of oil continues to rise and look at new highs which is bad for bonds.  Overall, the markets will very likely be flat today as everyone holds their breath to see what happens with the FED meeting beginning today, and wrapping up tomorrow at 2:15 ET.

In addition, the Consumer Confidence report for June came out at 50.4, well below expectations of 56.0.  It is not surprising that consumers are nervous, but for the report to come in 5.6 points below expectations is significant.

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