Good Afternoon Everyone and Happy Wednesday! The markets are still reeling from yesterday’s huge sell off, and right before the end of the month, too. Wow, what a bummer for Bullish traders and those poor fund managers who won’t get their million dollar bonuses this quarter. We all feel very badly for them!
Equity markets shot up right out of the gate in an attempt to recoup some of the losses from yesterday, and hence, credit markets ran for cover. However, when the ADP Employment Change Report was released about 8:30 a.m. our time, the news smacked the markets back down to the flat line. The report states that private payrolls for June increased by only 13,000 jobs . . . quite a bit lower than the 61K for which analysts were looking. This also puts the fear of God into the traders about what Friday’s Gov’t official unemployment numbers will look like.
Hence . . . credit markets have settled back down, but we are looking for a volatile day with traders settling quarter-end positions throughout the afternoon.
Ara Melkonians
Wednesday, June 30, 2010
Tuesday, June 22, 2010
Update #2/ Week of June 21, 2010 (Ara Melkonians)
Good Afternoon Everyone and Happy Tuesday! Yesterday we extended our streak of 100+ point moves on the Dow when the Index went from plus nearly 150 points at it’s high early in the session, to close with a loss of 8 points. The NASDAQ ended with a surprising loss of 21 points or nearly 1%. Stock traders must be frustrated as the first ½ of the year comes to a close in just 7 trading sessions and they don’t have much to show for 6 months of work thus far. In fact, the S&P is 1 point below where it started 2010 back on Jan 1. The Dow has gained a whopping 27 points in that same period of time. Not very impressive.
Today’s housing report from the Nat’l Association of Realtors isn’t doing much to help rally stocks, either. We learned this morning that existing home sales actually dropped 2.2% in May surprising economists who were expecting a 6% rise! Now that was quite a miss! On an annualized basis, analysts were expecting a rate of 6.1M and reality came in at 5.66M last month. We were supposed to have some follow thru from the tax incentive that expired at the end of April, but apparently that was not the case. This does not bode well for June’s numbers and the subsequent months ahead.
The silver lining in this story is that inventories of unsold homes dropped 3.4% to 3.89M – this represents an 8.3 month supply at May’s sales pace. However, we know that banks are holding on to thousands (and literally upon thousands) of homes yet to be released into the market place. Another happy part of the story is the median sales price for May was 179K . . . up 2.7% from May of 2009. Also, in a different report, the House Price Index for April showed an increase of .8% from the previous month, when the experts were looking for a rise of .3%.
Discussions this morning on CNBC and around the offices of mortgage and real estate firms ought to be concerning home prices for the remainder of 2010. With 450K consumers bailing on their loan modification, a new wave of adjustable mortgages maturing this year and no tax incentive . . . what will happen with foreclosures the 2nd half of this year. And . . . how will that impact home prices? Are we in for a double dip? The magic 8 ball says, “maybe so.” MI companies seem to be betting that prices will not drop significantly, but the guy on CNBC this morning said maybe 10%, maybe 25% further drop. That would be bad.
I am in the office all day today and available for your pricing or loan scenario questions. The results of a 2 year Treasury auction will be released today. We’ll see if this has any impact on pricing. We are about where we were on Friday with our rates today. Rates are holding steady. J Have a terrific Tuesday!
Today’s housing report from the Nat’l Association of Realtors isn’t doing much to help rally stocks, either. We learned this morning that existing home sales actually dropped 2.2% in May surprising economists who were expecting a 6% rise! Now that was quite a miss! On an annualized basis, analysts were expecting a rate of 6.1M and reality came in at 5.66M last month. We were supposed to have some follow thru from the tax incentive that expired at the end of April, but apparently that was not the case. This does not bode well for June’s numbers and the subsequent months ahead.
The silver lining in this story is that inventories of unsold homes dropped 3.4% to 3.89M – this represents an 8.3 month supply at May’s sales pace. However, we know that banks are holding on to thousands (and literally upon thousands) of homes yet to be released into the market place. Another happy part of the story is the median sales price for May was 179K . . . up 2.7% from May of 2009. Also, in a different report, the House Price Index for April showed an increase of .8% from the previous month, when the experts were looking for a rise of .3%.
Discussions this morning on CNBC and around the offices of mortgage and real estate firms ought to be concerning home prices for the remainder of 2010. With 450K consumers bailing on their loan modification, a new wave of adjustable mortgages maturing this year and no tax incentive . . . what will happen with foreclosures the 2nd half of this year. And . . . how will that impact home prices? Are we in for a double dip? The magic 8 ball says, “maybe so.” MI companies seem to be betting that prices will not drop significantly, but the guy on CNBC this morning said maybe 10%, maybe 25% further drop. That would be bad.
I am in the office all day today and available for your pricing or loan scenario questions. The results of a 2 year Treasury auction will be released today. We’ll see if this has any impact on pricing. We are about where we were on Friday with our rates today. Rates are holding steady. J Have a terrific Tuesday!
Monday, June 21, 2010
Update #1/ Week of June 21, 2010 (Ara Melkonians)
Good Morning Everyone and Happy Monday! Today’s market looks almost identical to last Monday’s start to the week. Equities markets last Monday saw the Dow shoot up over 100 points, only to end the day in the basement. However, Tuesday’s rally of over 200 points was pretty much the gain for the week for the Dow by the close on Friday. This morning saw the Dow jump up almost 150 points, however, the rally is dissipating and at this moment, with the Dow is only up less than 60.
With a lack of economic reports and corporate news from the US today, the big news comes from Asia where the Peoples Bank of China has decided to let its currency rate move along with the markets and “float” instead of being fixed by the Gov’t-run bank. The Communist run country has long been accused of deliberately undervaluing its currency in an effort to boost exports. This decision now allows the currency (the Yuan) to float along with markets and this move is seen as a necessary policy to help curb inflation which is climbing wildly over there.
The Asian markets obviously liked the announcement as the Hang Seng rallied over 600 points early this morning! Tim Geithner, US Treasury Sec, said, “We welcome China’s decision to increase the flexibility of its exchange rate. Vigorous implementation would make a positive contribution to strong and balanced global growth.” US corporations that export to China are expected to benefit from this decision, especially those that provide natural resources such as energy and metals. Thus, we saw the stock market shoot up right out of the gate this morning, and gold hit a new high in over night trading.
Oil prices are up, which always aids the Dow. Treasuries ran for cover early this morning, but have since come back into the game. Hence, our pricing is about .250 to .375 worse in fee then we were on Friday. However, if the trend of the last couple hours continues, we should see some improved pricing and get back closer to where we were when we finished the week last week. I’m in the office all day today, to help you in any way I can. Please call me here or email me if I can be of assistance to you with a loan scenario or pricing question. Have a terrific Monday and a very profitable week!
With a lack of economic reports and corporate news from the US today, the big news comes from Asia where the Peoples Bank of China has decided to let its currency rate move along with the markets and “float” instead of being fixed by the Gov’t-run bank. The Communist run country has long been accused of deliberately undervaluing its currency in an effort to boost exports. This decision now allows the currency (the Yuan) to float along with markets and this move is seen as a necessary policy to help curb inflation which is climbing wildly over there.
The Asian markets obviously liked the announcement as the Hang Seng rallied over 600 points early this morning! Tim Geithner, US Treasury Sec, said, “We welcome China’s decision to increase the flexibility of its exchange rate. Vigorous implementation would make a positive contribution to strong and balanced global growth.” US corporations that export to China are expected to benefit from this decision, especially those that provide natural resources such as energy and metals. Thus, we saw the stock market shoot up right out of the gate this morning, and gold hit a new high in over night trading.
Oil prices are up, which always aids the Dow. Treasuries ran for cover early this morning, but have since come back into the game. Hence, our pricing is about .250 to .375 worse in fee then we were on Friday. However, if the trend of the last couple hours continues, we should see some improved pricing and get back closer to where we were when we finished the week last week. I’m in the office all day today, to help you in any way I can. Please call me here or email me if I can be of assistance to you with a loan scenario or pricing question. Have a terrific Monday and a very profitable week!
Wednesday, June 16, 2010
Update #3/ week of June 14, 2010
Good Morning Everyone and Happy Wednesday! Equity markets rallied yesterday like there was no tomorrow. We discussed yesterday morning at this time, that absent a derailment like some big announcement from Greece or something, this rally seemed to have some steam and could finish the day in positive territory. Boy did it! The Dow finished the day up over 200 points, and the good news is, credit markets didn’t over react on the news. In fact, the 10 year note this morning is right where it was on Monday morning and pricing, although worse than yesterday, is pretty much right back where were at the beginning of the week.
Today, the markets seem to be taking a bit of a breather, although early morning losses have been wiped away and we are pretty much right at the flat line for the day. So, we have to cheer the equities that they put on quite a show yesterday, powering through their 200 day moving averages, and are able to hold on to those gains today.
This morning’s economic news presents a mixed bag for the economy. First of all, the PPI fell a seasonally adjusted .3% in May according to the Labor Dept. This should be good news, in that when producers show a drop in prices it usually carries through to lower prices for the consumer 4 to 6 months down the road. Analysts, however, were looking for a drop of .6%, so it comes as a bit of a disappointment. Also, the Core PPI came in with an increase of .2% when the experts were looking for a rise of .1% -- shows how much influence gas and energy prices stabilizing in May held inflation in check. Producer’s Prices, however, are up 5.3% from last May – the biggest jump since Sept of 2009.
With inflation seemingly under control, we turn our attention to the more headline news of the housing industry. Traders were disappointed to hear this morning that housing starts fell 10% to a seasonally adjusted annual rate of 593K homes in May. This represents the lowest level, according to the Commerce Dept, since December. Some would have thought that warmer weather and Summer Sun would have helped housing starts, but apparently this is not the case. Building permits fell last month, too, for a second month in a row. Starts of SFR’s dropped 17%, the lowest in a year. Nobody wants to hear bad news in the housing sector, but there just aren’t enough buyers available out there for which these builders to want to build homes.
This not so happy housing news is helping to keep credit markets in positive territory today after not losing much ground yesterday. Pricing is good today considering everything going on. We’ve had 100 point swings on the Dow the first 2 days of the week, we’ll see how today finishes up. Speaking of today, I will be here in the office all day today. Call me here or email me with any loan scenario or pricing questions . . . and have a terrific Humpday!
Today, the markets seem to be taking a bit of a breather, although early morning losses have been wiped away and we are pretty much right at the flat line for the day. So, we have to cheer the equities that they put on quite a show yesterday, powering through their 200 day moving averages, and are able to hold on to those gains today.
This morning’s economic news presents a mixed bag for the economy. First of all, the PPI fell a seasonally adjusted .3% in May according to the Labor Dept. This should be good news, in that when producers show a drop in prices it usually carries through to lower prices for the consumer 4 to 6 months down the road. Analysts, however, were looking for a drop of .6%, so it comes as a bit of a disappointment. Also, the Core PPI came in with an increase of .2% when the experts were looking for a rise of .1% -- shows how much influence gas and energy prices stabilizing in May held inflation in check. Producer’s Prices, however, are up 5.3% from last May – the biggest jump since Sept of 2009.
With inflation seemingly under control, we turn our attention to the more headline news of the housing industry. Traders were disappointed to hear this morning that housing starts fell 10% to a seasonally adjusted annual rate of 593K homes in May. This represents the lowest level, according to the Commerce Dept, since December. Some would have thought that warmer weather and Summer Sun would have helped housing starts, but apparently this is not the case. Building permits fell last month, too, for a second month in a row. Starts of SFR’s dropped 17%, the lowest in a year. Nobody wants to hear bad news in the housing sector, but there just aren’t enough buyers available out there for which these builders to want to build homes.
This not so happy housing news is helping to keep credit markets in positive territory today after not losing much ground yesterday. Pricing is good today considering everything going on. We’ve had 100 point swings on the Dow the first 2 days of the week, we’ll see how today finishes up. Speaking of today, I will be here in the office all day today. Call me here or email me with any loan scenario or pricing questions . . . and have a terrific Humpday!
Wednesday, June 9, 2010
Update #3, week of June 7 2010
Good Morning Everyone and Happy Wednesday! Make that 3 days in a row – triple digit moves for the Dow. Yesterday’s close up 123 points put credit markets on their heels going into today’s trading session. Uncle Ben’s testimony this morning before the House Budget Committee has given impetus to the rally in equities this morning and we are up over 100 points on the Dow at this moment.
Credit markets are taking it a bit on the chin as the 10 year note yield moves back over the 3.20 mark. Fortunately, our pricing hasn’t retreated much, we’re about .125 and ½ of an .125 (18 bps) worse than we were yesterday at this time on our conforming 30 year fixed rebate offerings. The higher note rates of 4.875 to 5.25 are affected very slightly.
The prepared speech by Ben Bernanke, Fed Chairman, included remarks about how the economy is gradually, yet slowly improving. No sign of a double dip in his models, but anything’s possible as we all know. He commented on Europe’s financial woes, but was encouraged that they are doing the things necessary to keep stabilization in the region. Of course, they lack a central bank as we are privileged to here in the States, to make sweeping monetary reforms for the EU.
Wholesale inventory data for April show that inventories increased .4% during the month, slightly less than the .5% for which analysts were looking. Inventory data for Crude Oil released this morning showed a draw of 1.8M barrels, this after several weeks of ample inventory reports. This is causing oil prices (July Crude) to rise to almost $75 a barrel and is helping oil stocks/companies add to the Dow rally this morning.
I will be in the office all day today, but I will be out in the field all day tomorrow. Please call me here or email me with any loan scenario or pricing questions. Have a terrific Humpday!
Warmly,
The Ara Melkonians TEAM,
Chief Mortgage Banker/ Operations Manager
Apply on line: www.ExpectGreatness.org
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334 N. Central Ave #208, Glendale, CA. 91203
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Note: This e-mail contains PRIVILEGED and CONFIDENTIAL information intended only for the use of the specific individual or entity named above. If you or your employer is not the intended recipient of this e-mail or employee or agent responsible for delivering it to the intended recipient, you are hereby notified that any unauthorized dissemination or copying of this e-mail or the information contained in it is strictly prohibited. If you have received this transmission in error, please immediately notify the person named above at once by telephone and delete the message. Thank you.
Credit markets are taking it a bit on the chin as the 10 year note yield moves back over the 3.20 mark. Fortunately, our pricing hasn’t retreated much, we’re about .125 and ½ of an .125 (18 bps) worse than we were yesterday at this time on our conforming 30 year fixed rebate offerings. The higher note rates of 4.875 to 5.25 are affected very slightly.
The prepared speech by Ben Bernanke, Fed Chairman, included remarks about how the economy is gradually, yet slowly improving. No sign of a double dip in his models, but anything’s possible as we all know. He commented on Europe’s financial woes, but was encouraged that they are doing the things necessary to keep stabilization in the region. Of course, they lack a central bank as we are privileged to here in the States, to make sweeping monetary reforms for the EU.
Wholesale inventory data for April show that inventories increased .4% during the month, slightly less than the .5% for which analysts were looking. Inventory data for Crude Oil released this morning showed a draw of 1.8M barrels, this after several weeks of ample inventory reports. This is causing oil prices (July Crude) to rise to almost $75 a barrel and is helping oil stocks/companies add to the Dow rally this morning.
I will be in the office all day today, but I will be out in the field all day tomorrow. Please call me here or email me with any loan scenario or pricing questions. Have a terrific Humpday!
Warmly,
The Ara Melkonians TEAM,
Chief Mortgage Banker/ Operations Manager
Apply on line: www.ExpectGreatness.org
CHECK TODAY'S RATES!
CLICK HERE TO SUBSCRIBE TO MY BLOG
CLICK HERE FOR CAREER OPPORTUNITIES
(702) 281-8256 or (866) 956-1077
Fax: 818.956.1947
334 N. Central Ave #208, Glendale, CA. 91203
*** Click HERE for our Latest WEBSITE release!! ***
Click Here for: LATEST GOVERNMENT NEWS RELEASES!!
Note: This e-mail contains PRIVILEGED and CONFIDENTIAL information intended only for the use of the specific individual or entity named above. If you or your employer is not the intended recipient of this e-mail or employee or agent responsible for delivering it to the intended recipient, you are hereby notified that any unauthorized dissemination or copying of this e-mail or the information contained in it is strictly prohibited. If you have received this transmission in error, please immediately notify the person named above at once by telephone and delete the message. Thank you.
Friday, June 4, 2010
Final Update/ Week of May 31, 2010
Good Morning Everyone and Happy Friday! Well, it’s not a happy Friday if you are heavily invested in the stock market and were hoping for a big rally today. We got a little sniff of this on Wednesday when the ADP Payroll report only posted 55K new jobs for the private sector. The Labor Dept came out with their official nonfarm payroll report for May which showed an increase of 431,000 jobs – one would think that would be enough to create a rally, but analysts were looking for 500K. The unemployment rate did drop to 9.7% from 9.9% the previous month and came in below the 9.8% anticipated.
Concerns in the EU have spooked the markets once again with word of Hungary being in financial trouble now. The Dow is down 225 points at this moment, off its lows of the morning. Just a few minutes ago we were down 250 and below the psychological 10K mark. Apparently that’s when things bounced back. If we stay near these levels for the day, this will be the 5th out of the last 6 weeks of negative closings on the Dow. Credit markets are improving big time this morning and pricing should be good.
I’m out of the office today out making calls. Reach out and touch me on my cell phone today if you need me. Have a terrific Friday and a very restful and relaxing weekend!
Concerns in the EU have spooked the markets once again with word of Hungary being in financial trouble now. The Dow is down 225 points at this moment, off its lows of the morning. Just a few minutes ago we were down 250 and below the psychological 10K mark. Apparently that’s when things bounced back. If we stay near these levels for the day, this will be the 5th out of the last 6 weeks of negative closings on the Dow. Credit markets are improving big time this morning and pricing should be good.
I’m out of the office today out making calls. Reach out and touch me on my cell phone today if you need me. Have a terrific Friday and a very restful and relaxing weekend!
Thursday, June 3, 2010
Update #4/ Week of May 31, 2010
Good Morning Everyone and Happy Thursday! The stock markets enjoyed quite a rally yesterday especially in the latter half of the day. News of positive retail sales from the three big auto makers helped to keep the rally going all through the afternoon. The Dow closed up 226 points by the end of the day. This rally helped to fuel rallies over seas as the Nikkei and the Hang Seng both closed up over 3% early this morning. Today we take a little breather as traders attempt to digest the veritable buffet of economic news on the wire this morning.
The first report released this morning in regards to the US economy was the latest ADP Employment Change report which told us that payrolls from private corporations increased by 55K in May. This number was a bit of a disappointment as analysts were looking for 70K. This off 10K from the upwardly revised number of 65K in April. Tomorrow the Labor Dept reports its Unemployment figures and will tell us how many jobs were created from their analysis. Initial Jobless Claims for the week ending May 29 came in at 453,000 – down 10K from the week previous, but not much of an improvement. Continuing jobless claims actually increased 31K from last week . . . the wrong direction for those claiming the employment situation in our country is getting better.
First Quarter nonfarm productivity’s final reading showed an increase of 2.8%, down from the 3.6% in the last revision. Unit labor costs for Q1 fell 1.3%, which is good, but not as good as the 1.6% anticipated. Factory orders for April increased 1.2%, but not as good as the 1.7% expected. We have a pattern here, can you see it? The ISM Services Index for May did come in at 55.4, almost at analysts expectations of a 55.6 reading. Most of the reports this morning were disappointing, and missed expectations. Thus the weakness in equity markets today, and the subsequent quieting in credit markets. (thank you!)
We did get a price worsening yesterday in mortgage rates when the stock market shot up like it did, and those rates are holding this morning. We’re about .375 in rebate off where we started yesterday morning on our fixed conforming product. Not too bad. Tomorrow will be an exciting day to be sure. I’m out in the field today and tomorrow. Call me if you have any loan scenario or pricing questions. Have a terrific Thursday!
The first report released this morning in regards to the US economy was the latest ADP Employment Change report which told us that payrolls from private corporations increased by 55K in May. This number was a bit of a disappointment as analysts were looking for 70K. This off 10K from the upwardly revised number of 65K in April. Tomorrow the Labor Dept reports its Unemployment figures and will tell us how many jobs were created from their analysis. Initial Jobless Claims for the week ending May 29 came in at 453,000 – down 10K from the week previous, but not much of an improvement. Continuing jobless claims actually increased 31K from last week . . . the wrong direction for those claiming the employment situation in our country is getting better.
First Quarter nonfarm productivity’s final reading showed an increase of 2.8%, down from the 3.6% in the last revision. Unit labor costs for Q1 fell 1.3%, which is good, but not as good as the 1.6% anticipated. Factory orders for April increased 1.2%, but not as good as the 1.7% expected. We have a pattern here, can you see it? The ISM Services Index for May did come in at 55.4, almost at analysts expectations of a 55.6 reading. Most of the reports this morning were disappointing, and missed expectations. Thus the weakness in equity markets today, and the subsequent quieting in credit markets. (thank you!)
We did get a price worsening yesterday in mortgage rates when the stock market shot up like it did, and those rates are holding this morning. We’re about .375 in rebate off where we started yesterday morning on our fixed conforming product. Not too bad. Tomorrow will be an exciting day to be sure. I’m out in the field today and tomorrow. Call me if you have any loan scenario or pricing questions. Have a terrific Thursday!
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