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
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