Mortgage Market News

Fed Chair Janet Yellen said this morning that the recent recovery in the U.S. economy still feels like a recession to many Americans, which is reason for the Federal Reserve to keep its "extraordinary" stimulus program intact for some time to come. Ms. Yellen went on to say that the number of people who voluntarily quit their jobs is noticeably below levels before the recession.
In economic news, the March Chicago PMI business report showed a big drop to 55.9 recorded this month from the 59.8 registered in February. It was the lowest reading since last August. The declines were seen both in the new orders component falling from 63.6 in February to the March reading of 63.6. The employment index fell to 50 from 59.3. A reading above 50 indicates expansion, below 50, contraction.
The closely watched government Jobs Report for March will be released this Friday where it is expected that employers added 195,000 new jobs. This comes after the average for the last three months of 129, which was partially attributed towards the harsh winter weather around the country. The Unemployment Rate is expected to come in at 6.5%. In order for the economy to be hitting on all cylinders, the economy will have to create in the 250,000 range per month.
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Mortgage Market News

Fitch Ratings has taken the U.S. off of its negative watch after concluding a review of its credit rating. The agency stated that the U.S. deserves the highest rating - "AAA." The recent debt-ceiling crises in 2011 and 2013 has not affected the country's ability to borrow. Fitch went on to say that the U.S. deficits are expected to decline, which was also a factor in the continued top tier credit rating.
Your local Starbucks may begin to start serving up something a bit stronger than your average Latte...wine and beer in the evening hours at select locations. The decision is due in part to the company's efforts to boost sales after the morning rush hour. There are currently 26 "Starbucks Evenings" around the U.S., which will soon be expanded to 40 where the locations sell bacon-wrapped dates, truffle macaroni and cheese and flat bread. Alcohol drinks can be ordered in these stores after 4pm.
The closely watched S&P 500 Stock Index rose to a fresh intraday all-time high in Friday's trading action, despite the tensions that continue to build in Ukraine. The index hit 1,884 in early trading. The S&P 500 is an index of 50 stocks chosen for market size, among other factors. The Index is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe.
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Mortgage Market News

Harsh weather continued to weigh on the housing market in February as construction on new homes fell slightly. However, future construction showed a big upswing as the temperatures rise across the nation. The Commerce Department reported that Housing Starts were steady last month rising to an annual rate of 907,000, below the 915,000 expected. Building Permits, a sign of future construction, surged by 7.5% to 1.018 million units, well above the 955,000 expected, but the big increase was concentrated in multiple-family dwellings.
Rising food prices were a key factor as consumer prices rose slightly in February. The price of food jumped by 0.4%, the biggest jump since September 2011, due to higher costs for meat, poultry, fish and vegetables. The Consumer Price Index (CPI) was up 0.1% last month, lower than the 0.2% that was expected. The Core CPI, which strips out food and energy, was up 0.1%, below the 0.2% estimated. The year-over-year Core rate remained at 1.6%, well below the Fed's upper target of 2%.
The two-day Federal Open Market Committee meeting will begin today and end on Wednesday with the monetary policy statement being released at 2:00pm ET. Federal Reserve officials will discuss monetary policy and how much impact the harsh winter weather has had on the U.S. economy. There will be no change to the Fed Funds Rate, currently at 0.25%, but the members will most likely continue to taper its massive Bond buying program, which is geared towards stimulating both the labor markets and economic expansion.
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Mortgage Market News

Americans filing for first time unemployment benefits fell to lows not seen since late November, signaling an uptick in the labor market. The Labor Department reported that Weekly Initial Jobless Claims fell by 9,000 in the latest week to 315,000, which was below the 329,000 that was expected. As the country moves out of the unbearable cold weather and massive snowstorms, the sector could be on its way to greener pastures.
In the foreclosure arena, RealtyTrac reported that foreclosure activity across the nation fell to its lowest level in more than seven years, due in part to the rise in home equity. February foreclosure starts fell by 9% from January to February and are down a whopping 27% from one year earlier. However, 14 states saw an increase in foreclosure starts last month, with New Jersey seeing an increase of 126% from a year ago.
The Commerce Department reported on Thursday that after falling for 2 months, Retail Sales rose by 0.3%, above the 0.2% expected in February, as consumers purchased a variety of goods, despite the harsh winter weather last month. When stripping out autos, sales also rose by 0.3%, above the 0.2% expected. Retail Sales make up about 1/3 of consumer spending, the main driver behind economic growth. If consumer spending can continue to expand, economic growth will continue to increase.
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Mortgage Market News

The closely watched S&P 500 closed at another record high on Friday of 1,878.04, which is a long way from the close of 676.53 hit five years ago at the height of the Great Recession. The S&P has gained 177% since that day, which is the best 5-year performance since the June 1996 to June 2000 rise during the dot-com bubble.
Shares of Dow component Boeing are lower this morning after its 777-20 plane with 239 passengers and crew disappeared during a Malaysia Airlines flight to Beijing on March 8. There are no signs of debris or any traces of the plane. Flight MH370 took off on Saturday morning from Kuala Lumpur International Airport en route to Beijing and vanished into thin air.
Popular pizza chain Sbarro has filed for Chapter 11 bankruptcy protection, which is the second time in bankruptcy since 2011. Sbarro closed 155 stores in February , though it still has 800 locations in more than 40 countries. The chain opened in 1956 as an Italian grocery store, and serves more than 71 million pizzas every year.
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Mortgage Market News

Americans filing for first time unemployment benefits fell to their lowest level since the end of November as the labor markets continues to experience some peaks and valleys. The Labor Department reported that Weekly Initial Jobless Claims fell by 26,000 in the latest week to 323,000, below the 338,000 that was expected. The four week moving average of claims, which irons out any seasonal abnormalities, fell by 2,000 to 336,500.
The labor markets received a double dose of good news today as planned layoffs by U.S. companies declined in February. Outplacement firm Challenger, Gray & Christmas reported planned layoffs declined by 7.3% from January to February to just under 42,000. A spokesman for the firm said this isn't what he'd expect if the economy is about to tip over or near recession. In addition, planned layoffs fell 24% from February 2013 to February 2104, which was the lowest February since the turn of the century.
In housing news, CoreLogic reported today that rising home prices across the U.S. in 2013 led to an uptick in home equity, with four million residential properties regaining equity in 2013. The report went on to say that 6.5 million residential properties with a mortgage are still in negative equity, while 10.4 million properties have positive equity, but are considered under-equitied.
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Mortgage Market News

News from Russia that there is no immediate need to invade Ukraine has sent the Stock markets skyrocketing today, while pressuring the Bond markets lower. The rally in the Stock markets have pushed the closely watched S&P 500 Index to an all-time intraday high of 1,871.
In housing news, CoreLogic reported today that home prices, including distressed sales, were up 12% in January 2014 compared to January 2013. This marks the 23rd consecutive month of year-over-year price increases. In addition, prices rose by 0.9% from December 2013 to January 2014. CoreLogic said price growth should continue as the market comes out of hibernation for the spring buying season.
The closely watched government Jobs Report for February will be released this Friday morning at 8:30am ET and will surely be a high impact market mover when it is delivered. It is expected that employers added 163,000 new jobs last month, which would be well above the 75,000 created in December and the 113,000 in January. The numbers will be scrutinized by the members of the Federal Reserve for any signs of a breakdown in the labor markets.
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