Market Watch This Week

Image by Nachosan

Image by Nachosan

I wanted to share some information that I received from Kara Robbins (her site is currently under construction and should be up in a day or so), a friend of mine in the Mortgage business. It is pretty good information on the current state of the market. I asked her for her sources and she got this information from Mortgage Market Guide.

Monday – Stocks are trading higher after Treasury Secretary Geithner unveiled a plan to remove toxic assets from financial institutions using money from the $700 Billion TARP fund. The government will mitigate the risk by offering private investors billions of dollars in low-interest loans to finance the purchases.

Also today, the housing market received good news when the Existing Home Sales came in stronger than expected. And, the US Dollar received a boost when China said it will continue to purchase US Treasuries, despite saying last week they were concerned about the value of those Treasuries.

Currently, Mortgage Bonds are attempting to stabilize after losing some ground late last week.

Tuesday Despite a major Stock rally yesterday, Mortgage Bonds were able to remain above an important floor of support. So far this morning, Stocks have started out lower, while Bonds have improved after being down initially.

On the radar today, Federal Reserve Chairman Bernanke and Treasury Secretary Geithner will testify about AIG in front of the House Financial Services Committee. In addition, President Obama is scheduled to talk with the nation at 8 pm Eastern Time.

With no economic reports due for release today, Stocks and Bonds will battle over investor dollars.

WednesdayMortgage Bonds opened lower this morning, but are now attempting to stabilize above a layer of support.

In the headlines today, the markets received good news when the Orders of Durable Goods for February came in better than expected and indicated the first increase in 6 months. New Home Sales also beat expectations. In addition, the inventory of unsold homes fell slightly. These are all encouraging signs.

Currently, Mortgage Bonds are holding above important levels of support.

ThursdayThis morning’s economic data had little effect on the Bond markets, as both the final Gross Domestic Product for 4th Quarter and Initial Jobless Claims came in near expectations. The number of people collecting state unemployment benefits has reached yet another new record, jumping to a seasonally adjusted 5.56 Million.

Later today, the government will auction off $24 Billion of 7-year Notes. This will be important to watch, as yesterday’s auction showed pretty weak results both in overall appetite and foreign buying, which in turn applied selling pressure in both Treasuries and Mortgage Bonds.

FridayMortgage Bonds are trading a bit higher so far this morning, as Stocks move lower. Also helping boost Bonds was a tolerable inflation reading of 0.2% for February and 1.8% year-over-year, after the volatile food and fuel figures are removed.

In other news, Personal Income came in slightly lower than estimates, while Personal Spending was inline with estimates. In addition, consumers are still hunkering down and saving, as the Personal Savings rate remained above 4% once again in February and among the highest savings levels seen in a decade.

Currently, Mortgage Bonds are trading in a wide range between resistance and support.

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