Market Update

Today is Fed day. At 2:15 p.m. Eastern Time, the Fed will release its monetary policy decision and statement. I believe the Fed will cut rates by .25%. However, it is also important to hear what the Fed has to say in their statement. For now, I am recommending to float, as the Bond trades just above a floor of support heading into today's important announcement.

Market Update

Mortgage Bonds are unchanged this morning, as traders appear to be waiting on the Fed’s decision tomorrow. The Fed will most likely cut interest rates by .25% when the decision is announced tomorrow at 2:15 p.m. Eastern Time. In other news, Consumer Confidence for October was reported lower than expectations. Back in July, Consumer Confidence hit a six-year high. However, it has been steadily slipping lower in response to the liquidity crunch, which started in August. For today, I am recommending to cautiously float. If anything changes, I will let you know.

Market Update

Bonds are trading relatively flat this morning, on a day with no economic news scheduled for release. As Traders await Wednesday’s Fed Meeting and Policy Statement, this could be the calm before the storm. Some of the notable releases this week include the quarterly Employment Cost Index, the important Core Personal Consumption Expenditure (PCE), and the Fed’s decision on rates--which looks like it will be a .25% cut.
As for now, I am recommending cautiously floating.

Market Update

Bonds are being pressured lower this morning on the heels of a higher stock market, led by strength in Countrywide and Microsoft.Technically, Mortgage Bonds are showing signs of topping out at long-term resistance--after reaching a level of previous market peaks over the past couple of days.However, I would like to be patient and recommend floating until the Fed Meeting next Wednesday. Should Bonds start to drift lower, I will switch to a locking stance.

Market Update

Bonds are basically unchanged this morning, after moving steadily higher since October 15th.
Durable Goods Orders for September were reported lower than expectations, while new home sales increased 4.8% since this time last September. At 1 p.m. Eastern Time, the U.S. Treasury will auction off $13 Billion in Five-Year Notes. The additional supply could weigh on the market if the auction isn't well received by investors-–especially by foreign investors. Technically, Bonds are at a high-water mark, at least for 2007. Therefore, I will continue to float, but will have a finger on the lock trigger, should prices show signs of reversing lower.

Market Update

Bond prices opened higher this morning, as Merrill Lynch, the country’s largest investment banker and broker, reported a far more massive 3rd quarter earnings loss than was expected. The entire Stock market is trading lower on this news, and this is helping Bond prices improve.
At 1 p.m. Eastern Time, the U.S. Treasury is going to auction $20 Billion in Two-Year Notes. A successful auction should support Bond prices this afternoon. This morning's activity shows continued buying pressure and this is a positive for Bonds; therefore, I recommend floating at this time.

Market Update

With no economic reports scheduled for release today, Stocks will likely continue their role in leading Bond prices. Apple, Inc. reported a huge 67% increase in quarterly profits on strong sales of their new iPhones and iPods, as well as their Mac computers. This news is moving Stocks higher this morning, which in turn is taking some steam out of Bonds.
Whether Stocks are able to hold their gains remains to be seen. Therefore, I am still recommending to cautiously float today, as Bonds are trading just between a floor of support and a ceiling of resistance.

Market Update

Since Stocks have dictated the direction for Bonds of late, last week's Stock tumble helped Bonds improve. With little news to influence Bonds until Wednesday, Stock prices could resume their role as lead dog. Bonds are having a tough time plowing through overhead resistance and have pulled back on some profit taking, as Traders position themselves with cash in-hand to jump on a Stock market rally. For now, I will recommend that we cautiously float; however, I will be keeping a close eye on Stocks.

Market Update

Mortgage Bonds are moving higher in response to continued selling pressure in Stocks. In fact, over the past week alone, the Dow has lost about 500 points, with Bonds gaining close to 100bps. Since there are no economic reports scheduled for release today, Bonds will likely continue to follow the positive direction set by Stocks and other technical signals. Therefore, I will continue to recommend Floating.

Market Update

Mortgage Bonds are trading modestly higher this morning based on continued weakness in Stocks, which is triggered by earnings losses from mortgage exposure. The Initial Jobless Claims was also reported well above expectations, which is good for the Bond market because it eases the threat of labor-based inflation. At noon Eastern Time today, the Philadelphia Fed Manufacturing Index for October will be released. If a number above or below expectations is released, it could spark a market reaction either way. For now, I will continue to recommend floating. However, I will be keeping a close eye on the Bond as it approaches several layers of overhead resistance.

Market Update

Mortgage Bonds are modestly higher and continue to hover near the 200-day Moving Average.
This morning, inflation watchers breathed a sigh of relief as the core rate of consumer inflation remained stable and matched expectations. In other news, however, the numbers of Housing Starts and Building Permits for September were reported weaker than expected and are at a 14-year low. As long as Bonds remain above multiple layers of support, I am continuing to recommend floating.

Market Update

Bond prices are catching a modest bid this morning in reaction to a comment made by Fed Chairman Ben Bernanke. In a speech last night, Bernanke stated that a recovery from the recent credit crunch could take longer to resolve than expected. Remember, bad economic news is good news for Bonds. Yesterday, Bonds made a nice bounce off of the 50-day Moving Average and, at the moment, have risen back above the key 200-day Moving Average. Should Stocks continue to be under selling pressure, Mortgage Bonds could improve further. Since Bonds remain above multiple layers of support, I will retain a floating stance for now.

Market Update

This week’s economic calendar features several reports that have the potential to move the market. But the big report for the week will be Wednesday's release of the Consumer Price Index. This read on consumer inflation could influence whether the Fed will again cut the Fed Funds Rate at their upcoming October 31st meeting. For the moment, the Bond price has drifted below the 50-day Moving Average. However, close underlying support could help prices improve, so we want to be patient. I recommend cautiously floating at this time.

Market Update

So far today, Bond prices remain relatively unchanged. Overall, they are still hovering near the important 200-day Moving Average, having touched it 12 of the past 16 trading days.
The Producer Price Index (PPI), which measures inflation at the wholesale or producer level, was reported this morning and showed some inflation pressure. Bonds initially traded lower on the news, but have since improved higher. Bonds continue to trade sideways, bouncing back and forth above the 200-day Moving Average. So for now, I will recommend floating, but I will be watching closely as the bond remains above a layer of support.

Market Update

Initial Jobless Claims were reported lower than expectations this morning, suggesting that the labor market continues to be resilient. This news is weighing on Bond prices in early trading.The weaker dollar, which makes our products less expensive to foreigners, has helped the Balance of Trade for August, which is currently at it's narrowest deficit since last January--and could be good news for inflation.But Bond prices are lower and have been unable to make a positive move higher on this good inflation news. Bonds have broken through some key levels of support and are just above a third level of support. For now, I will recommend to cautiously float as I watch to see if Bonds can hold their current ground.

Market Update

Yesterday's Fed Meeting Minutes pressured Bonds lower. Why? The main reason is that the less vigilant tone towards inflation has Bond traders thinking that nobody is in the Bond's corner, if inflation is allowed to emerge. Technically, Bonds have failed to hold on to support at the 200-day Moving Average, but we have dipped below this level a few times over the past couple of weeks. There are several layers of support below. So, at this time, I will recommend floating. If anything changes, I'll let you know.

Market Update

After taking a day off yesterday for the Columbus Day holiday, Mortgage Bonds are trading just above the 200-day Moving Average this morning. There are no economic reports set for release today; however, at 2 pm Eastern Time, the Fed will release the Minutes to the Sept 18th Meeting. This could be a market mover, as Traders scrutinize the Fed’s discussion about the state of the economy, inflation, and the rationale for cutting the Fed Funds Rate by .50%.
As long as the Bond can remain above the 200-Day Moving Average, I will recommend Floating.

Market Update

The Jobs Report hit the wires this morning, as the U.S. Department of Labor reported 110,000 new jobs created in September, which was above most economists’ expectations of 100,000.
With many people looking for a downward miss on this report, the stronger than expected reading pushed Bond prices a bit lower, causing home loan rates to rise. However, as I expected, the main reason for the selling pressure on Bonds was the huge revision to the job numbers reported for July and August--to the tune of 118,000 jobs.

The 200-day Moving Average did provide some support as the Bond dipped down to hit this floor and rebounded slightly. As long as the Bond remains above the 200-day Moving Average, I will recommend floating, but I will be watching carefully to make sure this support level holds.

Market Update

Bond prices are flat this morning as the markets await the Jobs Report due to be released tomorrow morning at 8:30 Eastern Time. You may remember that last month's jobs number reported a surprising loss of 4,000 jobs.

Currently, economists are expecting 100,000 new jobs to be created. If tomorrow's job number comes in higher--or if last month’s number is revised higher--the result should be a significant worsening in Bond prices, which will pressure home loan rates higher. However, a number that shows continued weakness should push Bond prices up…thereby helping home loan rates to improve.

I feel that the bar has been set at the lower level, which may lessen the positive impact if a weaker number is announced, but on the other hand may exacerbate the negative impact on home loan rates if a higher job number is released.
Therefore, while it is difficult to forecast tomorrow morning’s results, I feel it is prudent to play it safe and lock in advance of the release.

Market Update

Bond prices are currently lower this morning on the heels of the ISM Services survey, which provides a non-manufacturing read on the economy. Overall, the index was reported at 54.8, just shy of expectations at 55.0. However, the 'prices paid' component of the survey showed some signs of inflation pressure.
Currently the Bond has dropped below the 25-day Moving Average, and as a result I will recommend locking.

Market Update

Yesterday, Mortgage Bonds bounced off support at the 200-day Moving Average. And, while prices did finish the day higher, the advance was stopped at the 25-day Moving Average resistance level. This morning the Pending Home Sales Index for August, which is the leading indicator of existing home sales, came in lower than expected and Mortgage Bonds improved slightly on the weak news. Later today, Dallas Federal Reserve President Richard Fisher is scheduled to speak in Dallas, Texas at 1:35 Eastern Time and a Q&A session is expected to follow. Bond traders will be listening closely, as Mr. Fisher has been known to rifle off remarks that could impact the market. Since Mortgage Bonds continue to trade above the 200-day Moving Average, I will continue to recommend floating.