Tag Archives: Italy debt problems

This Week’s Market Report

Mortgage Market Report - Weeks Wrap Up  
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Not much news this week, aside from the Lebron James announcement...he's
going to Miami if anyone cares...

The biggest news this week was the Initial Jobless Claims report on
Thursday which was a little better than expected.  "Just" 454,000 people
filing first time unemployment benefits .  But that was a bit better
than the expected 465,000 and somewhat better than last weeks 472,000
first time filings.  And with tensions simmering down overseas, the
stock market mustered a rally and has closed today above 10,000 again,
settling at 10,198 ( DOW Index ). 

Boosting stocks were also comments coming from the Wall Street Journal
that chances of a double dip recession are "exaggerated.  Normally,
soaring stock prices are a damper for bonds and mortgage rates, but
mortgage bonds held their own.  The employment market is still vastly
week and still no real signs of economic improvement which is keeping
bonds favorable and rates low.  However, these ultra low rates will not
last forever and any catalyst seen with economic improvement will send
rates upward and possibly in a hurry.  

I expect to see a continuing see-saw with stocks and bond prices in
coming weeks which should keep mortgage rates at bay.  The markets are
itching for any reason to rejoice and just a glimmer of hope will send
stocks higher as we saw this week.  But until we see data that shows
sustained improvement, bonds and mortgage rates will benefit.

The Obama Adminstration lost its bid to reinstate the moratorium on
offshore drilling in Federal Appeals court.  However, Interior Secretary
Kenneth Salazar, plans on coming up with a new plan and issue a new
moratorium.  While the 33 exploratory wells could resume drilling,
companies may not bother with the expense of start up costs with the
future still in limbo. As such, the threat of additional lawsuits to
reinstate the moratorium is effectively establishing a de facto
moratorium.

Stay tuned, next week we have Retail Sales Report and the Consumer and
Producer Price Index which are always tide changers.  Plus, the reality
is that Europe still has a long way to go and now whispers that Italy
may be the next European country to announce debt problems.  
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