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Archive for Consumer Confidence report

Stock Rally Puts Pressure On Mortgage Bonds

Stocks are rallying today sending mortgage bonds lower.

Crude Oil traded below a significant support level around $121 per barrel today, and that triggered bullish sentiments on the stock market.  In addition, Consumer Confidence for June was reported today at 51.9 slightly above the 50.0 that was predicted.  This is not a significant move upward, but it is the first move upward since December.  With oil down and confidence up, traders are pulling money out of bonds and putting it into stocks, and this as you know is not good for mortgage rates.

If you have a loan file in processing currently, I recommend locking your rate on continued volatility in the markets.

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.