Treasuries opened to the downside by as much as 6/32’s on the cease fire in Libya and “hopeful” comments on Japan’s radiation issues. The G-7 also surprised the market with a coordinated dollar intervention, trying to stabilize the rising Yen. Oil was also off sharply at the open. All of the above have reversed course except for stocks which have been strong since the get go. Currently, the 10 year note is off 9/32’s (yield 3.28%), mortgage backs off 2/32’s and stocks are plus 120 on the big board. Trading is very choppy yet buyers of treasuries seem to step in every time the market weakens. One word of caution is that the uptrend on our hourly bar chart (10 year note futures) has been broken. Trading below that uptrend, especially if we end that day at lower levels will signal a short term top with a high probability of consolidation coming next week. Trouble with that is no one knows what will happen over the weekend on a host of fronts. We’ll wrap this up later today with our best guess and a picture of the chart. TGIF.
Scott Eggen
SVP, Capital Markets
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252
------------------
© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Friday, March 18, 2011
Thursday, March 17, 2011
Market Update - 03-17-11
Tons of news this morning starting with Weekly Unemployment Claims which fell 16K to 385K. Continuing Claims fell 80K to their lowest level since September 2008. Both numbers surprised the market a bit as they were well below consensus. Next up was CPI, inflation at the consumer level. That index rose .5% headline and .2% core index after you strip out food and energy. The release was not quite as hot as yesterday’s PPI index but just the same, inflation seems to be creeping back into the pipelines, especially in food and energy. Industrial Production figures were also released, down .1% for the first time since October 2010. Capacity Utilization was off .1 to 76.3, telling us that there is still considerable slack in the economy. The Chicago Fed manufacturing index hit the tape as well, up 1.1% to 84.1. The auto component of this index led the way, jumping 4.2%. All of the above paints a mixed picture of the economy, yet one that leans of the side of expansion. The data however, is taking a back seat to radiation issues in Japan, geo-political concerns in the MENA (especially Bahrain and Libya), and sovereign debt issues in Euro land. The outcome of six Japanese nuclear reactors has people and the markets riveted. “If” they can contain them, the markets will settle down. “If not,” things will get extremely volatile. Stocks, which have been slipping 6 of the last 8 days, finally caught a break. Strong buying off good support following a 7% correction has done the trick. Dow plus 170, Naz plus 42. Strong stocks have taken a bite out of bonds, sending the 10 year note lower by 21/32’s. Mortgage backs have followed suit, down 13/32’s as I type. We have also just taken out my bullish uptrend line on the 60 minute chart. That is not the end of the world but a close at the lows (high yields) would put us back on the defensive. With the run up (rally) in mortgage pricing build on flight to safety buying, a reversal would not be a surprise. Have a great day and may the luck of the Irish be with you!
Scott Eggen
SVP, Capital Markets
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252
------------------
© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Scott Eggen
SVP, Capital Markets
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252
------------------
© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Tuesday, March 15, 2011
Market Update - 03-15-2011
The continuance of human and economic tragedy in Japan has set off another round of volatile trading. Just a few hours ago, a 6.2 earthquake hit Japan, the most powerful aftershock since Friday’s devastating earthquake. Buildings were shaking but as of now, no risk of another tsunami is present. The latest threat to Japan and their citizens is the instability of four nuclear reactors. That fear has sent stocks reeling and bonds flying. Oil is lower, off $4.00 a barrel while most commodities are on the slide. Gold is off over $40.00. Stocks across the globe took a hit with Japan off nearly 11.0%. Stateside, the Dow opened nearly 300 points lower but is currently off its lows, down 231. Bonds jumped at the open with the 10 year note up close to 1 point. Mortgage backs have following suit but are muted with gains on current coupon MBS plus 9/32’s. We did have some economic news this morning as the NAHB Housing Index rose 1 point to 17. It is now at its highest level since May 2010. New York’s Empire State Manufacturing Index was also released, up a touch over 2 points to 17.50. Within the index, new orders were weak, suggesting it will be hard to maintain this level into the future. We also have the Fed Open Market Committee meeting today (1 day affair) with results or any change in policy due out at 1:15 pm cst. Given the latest in Japan, we expect little to no change. With the 10 year note trading at 3.27%, we have matched the lowest yields since December. Chart wise, the positive tone is underpinning bullish sentiment on most time frames and oscillators. We need to keep in mind that this rally is solely based on flight to quality fear trading. Conditions are extremely volatile and can reverse at any time. Handicapping where interest rates go is a tough business as we don’t know what we’ll face next. Incredible how intertwined the global economy is. One more thought; for your customers that missed the last interest rate bus, waiting to refi if rates when to 0%, they have a second chance.
Scott Eggen
SVP, Capital Markets
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252
------------------
© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Scott Eggen
SVP, Capital Markets
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252
------------------
© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Monday, March 14, 2011
Market Outlook for the week of March 14, 2011
QUOTE OF THE WEEK..."An economist's guess is liable to be as good as anybody else's."--Will Rogers
INFO THAT HITS US WHERE WE LIVE...Last week there was no guessing involved in the Mortgage Bankers Association (MBA) report that applications for purchase mortgages hit their highest level of the year. The MBA credited this to the improving job market and mortgage rates remaining at super low levels. This demand for purchase mortgages was up 12.5% from the week before and at its highest level since last May. Freddie Mac's weekly survey of conforming mortgages showed mortgage rates pretty much unchanged, at historically low levels for the third week in a row.
Another UCLA Anderson Forecast came out, reporting that the economy is growing and employment should soon pick up steam. But this somewhat pessimistic group of West Coast economists feel housing will continue to lag behind other sectors. Nonetheless, they see a "modest" recovery in housing starts, up 12% this year, then hitting 1 million in 2012 and approaching 1.5 million in 2013, thanks to pent-up demand.
BUSINESS TIP OF THE WEEK...Get out of your comfort zone. Don't keep doing things a certain way just because that's how you've always done them. Be open to new ideas and technology. Things can't change for the better if you're not open to change.
>>> Review of Last Week
STOCKS SLIP...All three stock market indexes registered their second weekly decline in the past three weeks. The Middle East continued to concern investors as the disturbances expanded to Saudi Arabia where no one on Wall Street wanted to see them go, fearing even higher oil prices. But Friday we were all shocked by the devastation of Japan's worst earthquake in over 100 years. Oil prices seemed far less of a worry and they actually wound up down for the week.
Economic news was light but net positive. New weekly unemployment claims were up a bit, after dropping the week before, but the four-week moving average is now 392,000, quite a bit below last summer's readings. Continuing unemployment claims dropped to 3.77 million, its lowest level since October 2008! These trends are in the right direction for the country overall and for housing in particular. Friday saw Retail Sales UP 1.0% in February, increasing now eight months in a row, their longest streak of gains in over ten years! Consumers are definitely helping out.
For the week, the Dow ended down 1.0%, at 12,044; the S&P 500 was down 1.3%, to 1,304; and the Nasdaq was down 2.5%, ending at 2,716.
Amidst slipping stocks, bond prices held up, with buying driven by the turmoil in the Middle East and strong auctions. The FNMA 4.0% bond we watch ended up .01 for the week, closing at $98.15. As noted above, Freddie Mac's weekly survey of conforming mortgages showed national average mortgage rates still at historically low levels. But buyers should not expect these rates to last forever, as the economic data continues to improve.
DID YOU KNOW?...The Federal Open Market Committee, or FOMC, is the policymaking body of the Fed. Its meeting this week is one of eight held each year to discuss the economy and monetary policy options to promote stable prices and growth.
>>> This Week’s Forecast
HOMEBUILDERS, INFLATION, THE FED...This week highlights three favorite topics. Wednesday we see how homebuilders are feeling, as reflected by February Housing Starts, expected to be down a little, and Building Permits, showing builders' sentiment further out, which should be up a bit.
Tuesday we'll have the FOMC Rate Decision from the Fed. Economists don't expect the Funds Rate to move off its rock-bottom level, but they'll dissect the Policy Statement coming out of the confab for signs of when the rate may go up. Rising inflation can hike the rate, but Wednesday's wholesale inflation (PPI) and Thursday's consumer inflation (CPI) readings are expected to hold steady.
>>> The Week’s Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Economic Calendar for the Week of March 14 – March 18
>>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months...Fed Chairman Ben Bernanke has been adamant about his commitment to keep rates where they are until he sees greater job growth and more traction in the economic recovery. The experts are talking about a rate hike later in the year, but the chances of that now are next to nil. Literally. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.
Current Fed Funds Rate: 0%–0.25%
Probability of change from current policy:
------------------
© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender
INFO THAT HITS US WHERE WE LIVE...Last week there was no guessing involved in the Mortgage Bankers Association (MBA) report that applications for purchase mortgages hit their highest level of the year. The MBA credited this to the improving job market and mortgage rates remaining at super low levels. This demand for purchase mortgages was up 12.5% from the week before and at its highest level since last May. Freddie Mac's weekly survey of conforming mortgages showed mortgage rates pretty much unchanged, at historically low levels for the third week in a row.
Another UCLA Anderson Forecast came out, reporting that the economy is growing and employment should soon pick up steam. But this somewhat pessimistic group of West Coast economists feel housing will continue to lag behind other sectors. Nonetheless, they see a "modest" recovery in housing starts, up 12% this year, then hitting 1 million in 2012 and approaching 1.5 million in 2013, thanks to pent-up demand.
BUSINESS TIP OF THE WEEK...Get out of your comfort zone. Don't keep doing things a certain way just because that's how you've always done them. Be open to new ideas and technology. Things can't change for the better if you're not open to change.
>>> Review of Last Week
STOCKS SLIP...All three stock market indexes registered their second weekly decline in the past three weeks. The Middle East continued to concern investors as the disturbances expanded to Saudi Arabia where no one on Wall Street wanted to see them go, fearing even higher oil prices. But Friday we were all shocked by the devastation of Japan's worst earthquake in over 100 years. Oil prices seemed far less of a worry and they actually wound up down for the week.
Economic news was light but net positive. New weekly unemployment claims were up a bit, after dropping the week before, but the four-week moving average is now 392,000, quite a bit below last summer's readings. Continuing unemployment claims dropped to 3.77 million, its lowest level since October 2008! These trends are in the right direction for the country overall and for housing in particular. Friday saw Retail Sales UP 1.0% in February, increasing now eight months in a row, their longest streak of gains in over ten years! Consumers are definitely helping out.
For the week, the Dow ended down 1.0%, at 12,044; the S&P 500 was down 1.3%, to 1,304; and the Nasdaq was down 2.5%, ending at 2,716.
Amidst slipping stocks, bond prices held up, with buying driven by the turmoil in the Middle East and strong auctions. The FNMA 4.0% bond we watch ended up .01 for the week, closing at $98.15. As noted above, Freddie Mac's weekly survey of conforming mortgages showed national average mortgage rates still at historically low levels. But buyers should not expect these rates to last forever, as the economic data continues to improve.
DID YOU KNOW?...The Federal Open Market Committee, or FOMC, is the policymaking body of the Fed. Its meeting this week is one of eight held each year to discuss the economy and monetary policy options to promote stable prices and growth.
>>> This Week’s Forecast
HOMEBUILDERS, INFLATION, THE FED...This week highlights three favorite topics. Wednesday we see how homebuilders are feeling, as reflected by February Housing Starts, expected to be down a little, and Building Permits, showing builders' sentiment further out, which should be up a bit.
Tuesday we'll have the FOMC Rate Decision from the Fed. Economists don't expect the Funds Rate to move off its rock-bottom level, but they'll dissect the Policy Statement coming out of the confab for signs of when the rate may go up. Rising inflation can hike the rate, but Wednesday's wholesale inflation (PPI) and Thursday's consumer inflation (CPI) readings are expected to hold steady.
>>> The Week’s Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Economic Calendar for the Week of March 14 – March 18
>>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months...Fed Chairman Ben Bernanke has been adamant about his commitment to keep rates where they are until he sees greater job growth and more traction in the economic recovery. The experts are talking about a rate hike later in the year, but the chances of that now are next to nil. Literally. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.
Current Fed Funds Rate: 0%–0.25%
Probability of change from current policy:
------------------
© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender
Friday, March 11, 2011
Market Update - 03-11-2011
An 8.9 magnitude earthquake has hit the coast of Japan overnight with aftershocks as big at 7.1. The quake hit right at the close of the Japanese stock market and is now the worst earthquake that has hit Japan in over 140 years. To make things worse, a Tsunami then swept over parts of Japan following the quake. The death toll is believed to already be in the hundreds and climbing. Hawaii was expecting a surge of up to six feet to hit this morning between 7:00 a.m. and 7:45 a.m. CT, but reports are coming in that the Tsunami affect in Hawaii was insignificant. There is also a warning for Alaska and the entire West Coast down to Mexico throughout the afternoon hours. In US market news this morning, Retail sales for February rose in-line with expectations 1.0%. This is best pace of growth in atleast four months, and is partly due to the large weather-related impact on sales in January. One of the larger components of the sale figures, vehicle and parts sales, rose 2.3%. The “Day of Rage” in Saudi Arabia has not played out into anything of substance so far. The day is almost over and there are no reports of massive protests or violence. The markets have been shaken by the thoughts of social unrest arising in Saudi Arabia and a quiet day will most likely encourage investors. Crude has traded below $100 this morning and the Japanese quake seems to take sentiment for the rest of today’s events. Potential economic affect in Japan is believed to be what is driving Crude prices down almost $3 this morning. The new 2011 high price today has forced early signs of a bullish trend to form. A close above 120-05( below 3.33%) would be the best way to boost the new signal. Dailies studies are still bullish, maintaining the same signals that began back in late Feb. Key support is now around 119-15 and any close below (above 3.42%) would neutralize our market and the bullish trend. Current levels are 3.36% on the 10yr, along with mortgage backs up a few ticks in the lower coupons.
PART TWO:
Just another update on some more economic numbers and current levels. Univ. of Michigan Consumer Sentiment Falls more than expected to 68.2 in March, down from 77.5 in February, and the lowest level since October 2010. Inflation concerns rose as the one-year inflation expectation index rose to 4.6% from 3.4% and the 5-to-10-year inflation outlook rose to 3.2% from 2.9%. Business inventories rose 0.9% in January to their highest level in two years and sales increased at their fastest pace in nine months. Sales for all businesses at the manufacturing, wholesale and retail level increased 2%, the seventh consecutive gain and the largest since March. The 10yr yield had slid down to 3.33%, the lowest since Jan. 31, however the 10yr has moved lower now with the yield back up to 3.39%. Stocks are off from lower levels and Crude has now slipped back over $100/barrel. Mortgage backs are off their highs as well and are currently trading down 2-3 ticks on lower coupons.
Joe Webb
VP, Trading/Pipeline Management
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252
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© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
PART TWO:
Just another update on some more economic numbers and current levels. Univ. of Michigan Consumer Sentiment Falls more than expected to 68.2 in March, down from 77.5 in February, and the lowest level since October 2010. Inflation concerns rose as the one-year inflation expectation index rose to 4.6% from 3.4% and the 5-to-10-year inflation outlook rose to 3.2% from 2.9%. Business inventories rose 0.9% in January to their highest level in two years and sales increased at their fastest pace in nine months. Sales for all businesses at the manufacturing, wholesale and retail level increased 2%, the seventh consecutive gain and the largest since March. The 10yr yield had slid down to 3.33%, the lowest since Jan. 31, however the 10yr has moved lower now with the yield back up to 3.39%. Stocks are off from lower levels and Crude has now slipped back over $100/barrel. Mortgage backs are off their highs as well and are currently trading down 2-3 ticks on lower coupons.
Joe Webb
VP, Trading/Pipeline Management
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252
------------------
© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Wednesday, March 9, 2011
Market Update 03-09-2011
Results of today’s 10 year note auction just hit the tape. 21 billion of the little beauties crossed the screen to yield 3.499% with 53% going to Indirect Bidders (strong buying). Bid to cover was 3.32% to 1, well above the average of 3.07% to 1 and just to show you how well subscribed it was, the issue traded through the screen by 2.4 bps. In other words, many traders wanted it but just didn’t get in on the action. Give it an A. The strong auction probably got a boost from continued geo-political concerns. As we speak, reports are flying about an oil terminal being bombed by Libyan aircraft. It just gets crazier over there. In other news, MBA Mortgage applications picked up last week, jumping 15.5%. Wholesale Inventories were also released, up 1.1% to the highest level since November 2008. This projects a positive sign for Factory Orders down the road. Technically, we’ve been in a tight range with very little price movement. The “inside day” is an indication of a Goldie Locks market where both buyers and sellers are in harmony. We have talked about this kind of a pattern before, one that’s called a triangle formation. The market tends to wind tighter and tighter will little movement until we reach the apex where a “breakout” occurs. The breakout should happen within a few days. The question will be what direction. For now, the 10 year note is up 14/32’s (yield 3.49%), mortgage backs up 6/32’s (we priced plus 3/32’s), and stocks are a mixed bag, up 19 points on the big board and down 11 on the Naz.
Scott Eggen
SVP, Capital MarketsPrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900Dallas, Texas 75252
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© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Scott Eggen
SVP, Capital MarketsPrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900Dallas, Texas 75252
------------------
© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Monday, March 7, 2011
Market Outlook for the week of March 7, 2011
QUOTE OF THE WEEK... "There are no constraints on the human mind, no walls around the human spirit, no barriers to our progress except those we ourselves erect."--Ronald Reagan
INFO THAT HITS US WHERE WE LIVE...We should be especially careful to not erect barriers to our progress just because of a minor setback, like the one we had with last week's Pending Home Sales. The National Association of Realtors (NAR) index of signed contracts on existing homes slipped in January for the second month in a row. But the drop wasn't as bad as expected and, as the NAR's chief economist said: "We should not expect the recovery to be in a straight upward path--it will zig-zag at times."
The latest NAR overall forecast gave an interesting picture of that recovery. Existing home sales should grow 8.1% this year and another 5.2% in 2012, with the median price essentially flat in 2011 before gaining over 3% next year. New home sales are forecast up about 5% this year, then up over 55% for 2012, with the median price up a bit in 2011, then up 3.5% next year. Fannie Mae's latest National Housing Survey reported that the vast majority of people believe housing prices will hold firm in 2011 and that Hispanics, African-Americans and Generation Y (18–34 years old) are more positive than other Americans about homeownership.
BUSINESS TIP OF THE WEEK...Do you know what's the most precious commodity in business? Time! Return calls and e-mails immediately, deliver what clients want sooner than they expect and you'll enhance your competitive edge.>>>> Review of Last WeekSQUEAKING HIGHER...Investors who were worried about oil prices hitting two-year highs amidst Libyan turmoil sent stocks down Tuesday. But economic data continued to portray a steady if slow recovery. So stocks shot back up Thursday by enough to put all three indexes ahead for the week, even after dipping a bit on Friday.
Encouraging economic news appeared on all fronts. The ISM Services index, tracking the sector that employs over 85% of our workforce, reached its highest level since 2005. ISM Manufacturing also hit a multi-year high. Meanwhile, inflation measured by Core PCE Prices, was up just 0.1% in January and 0.8% the past year, well within the Fed's acceptable range. Then Friday we had the February Employment Report with 192,000 new jobs overall. The private sector contributed 222,000 jobs, its 12th monthly gain in a row. And the unemployment rate unexpectedly dropped again, this time to 8.9%!For the week, the Dow ended up 0.3%, at 12,170; the S&P 500 was up 0.1%, to 1,321; and the Nasdaq was up 0.1%, ending at 2,785.
Bond prices were hurt by the improving economic data, but went back up as a result of the safe-haven buying driven by continuing tensions in the Middle East and rising oil prices. The FNMA 4.0% bond we watch ended down slightly for the week, closing at $98.14. Mortgage rates dropped for the third week in a row according to Freddie Mac's weekly survey of conforming mortgages. But buyers should note that these low rates will not last forever, as the improving employment picture will eventually edge them back up.
DID YOU KNOW?...The median home price is the midpoint price for all homes sold. 50% of selling prices were above it, 50% were below. It is less biased than the average home price, which can be skewed upward by a few high-priced homes.
>>>> The Week’s Forecast
WHAT'S UP WITH THE CONSUMER?...Frankly, it's a pretty quiet week for economic news, but there are a few significant readings on the state of the consumer at the very end. Friday we see February's Retail Sales reports, which are expected to show continued growth, both with and without auto sales included. The University of Michigan Consumer Sentiment Index should show consumer confidence holding pretty steady. Thursday, you'll want to take note of Initial and Continuing Jobless Claims, as jobs remain key to the economic and housing market recovery.
>>>> The Week’s Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Economic Calendar for the Week of March 7 – March 11
>>> Federal Reserve Watch
Current Fed Funds Rate: 0%–0.25%:
Probability of change from current policy:
-----------------
© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
INFO THAT HITS US WHERE WE LIVE...We should be especially careful to not erect barriers to our progress just because of a minor setback, like the one we had with last week's Pending Home Sales. The National Association of Realtors (NAR) index of signed contracts on existing homes slipped in January for the second month in a row. But the drop wasn't as bad as expected and, as the NAR's chief economist said: "We should not expect the recovery to be in a straight upward path--it will zig-zag at times."
The latest NAR overall forecast gave an interesting picture of that recovery. Existing home sales should grow 8.1% this year and another 5.2% in 2012, with the median price essentially flat in 2011 before gaining over 3% next year. New home sales are forecast up about 5% this year, then up over 55% for 2012, with the median price up a bit in 2011, then up 3.5% next year. Fannie Mae's latest National Housing Survey reported that the vast majority of people believe housing prices will hold firm in 2011 and that Hispanics, African-Americans and Generation Y (18–34 years old) are more positive than other Americans about homeownership.
BUSINESS TIP OF THE WEEK...Do you know what's the most precious commodity in business? Time! Return calls and e-mails immediately, deliver what clients want sooner than they expect and you'll enhance your competitive edge.>>>> Review of Last WeekSQUEAKING HIGHER...Investors who were worried about oil prices hitting two-year highs amidst Libyan turmoil sent stocks down Tuesday. But economic data continued to portray a steady if slow recovery. So stocks shot back up Thursday by enough to put all three indexes ahead for the week, even after dipping a bit on Friday.
Encouraging economic news appeared on all fronts. The ISM Services index, tracking the sector that employs over 85% of our workforce, reached its highest level since 2005. ISM Manufacturing also hit a multi-year high. Meanwhile, inflation measured by Core PCE Prices, was up just 0.1% in January and 0.8% the past year, well within the Fed's acceptable range. Then Friday we had the February Employment Report with 192,000 new jobs overall. The private sector contributed 222,000 jobs, its 12th monthly gain in a row. And the unemployment rate unexpectedly dropped again, this time to 8.9%!For the week, the Dow ended up 0.3%, at 12,170; the S&P 500 was up 0.1%, to 1,321; and the Nasdaq was up 0.1%, ending at 2,785.
Bond prices were hurt by the improving economic data, but went back up as a result of the safe-haven buying driven by continuing tensions in the Middle East and rising oil prices. The FNMA 4.0% bond we watch ended down slightly for the week, closing at $98.14. Mortgage rates dropped for the third week in a row according to Freddie Mac's weekly survey of conforming mortgages. But buyers should note that these low rates will not last forever, as the improving employment picture will eventually edge them back up.
DID YOU KNOW?...The median home price is the midpoint price for all homes sold. 50% of selling prices were above it, 50% were below. It is less biased than the average home price, which can be skewed upward by a few high-priced homes.
>>>> The Week’s Forecast
WHAT'S UP WITH THE CONSUMER?...Frankly, it's a pretty quiet week for economic news, but there are a few significant readings on the state of the consumer at the very end. Friday we see February's Retail Sales reports, which are expected to show continued growth, both with and without auto sales included. The University of Michigan Consumer Sentiment Index should show consumer confidence holding pretty steady. Thursday, you'll want to take note of Initial and Continuing Jobless Claims, as jobs remain key to the economic and housing market recovery.
>>>> The Week’s Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Economic Calendar for the Week of March 7 – March 11
>>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months...Last week Chairman Ben Bernanke told the Senate Finance Committee that even though economic conditions were improving, rates should stay low for his familiar "extended period" until he sees stronger job creation. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.
Current Fed Funds Rate: 0%–0.25%:
Probability of change from current policy:
-----------------
© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Friday, March 4, 2011
Market Update 03-04-2011
TGIF. Nonfarm Payrolls jumped 192K in February, confirming slow but steady job growth. January was revised higher, now at 63K versus the reported plus 36K. Weather suppressed January’s print on the initial release. The surprise in this report was another drop in the Unemployment rate which fell from 9% to 8.9%. Many think this is funny math but in our opinion, the drop is all about people giving up on their job search which reduces the unemployment count. That’s how you take a negative and turn it positive. Within the numbers, the Services Producing sector posted the best gain, adding 152K to the payrolls. Even Construction employment increased by 33K. Overall, the report had a little something for everyone; better jobs growth (plus 192K), falling unemployment rate (8.9%), and a close to consensus report that has kept bond, note, and mortgage back yields steady to lower. I’ll take this report any day. Factory Orders were also released, up 3.1% following last month’s plus 1.4% print. The strong showing was driven by a 3.1% gain in Non-Durable goods orders. Those are products with less than 3 years shelf life. Durable Goods did not impress once you stripped out the orders for aircraft. Overall, we’ll call the report “solid”. Reaction to all of this has not been what you would expect. Currently, stocks are off 50 points, 10 year notes are up a dozen (yield 3.52%), and mortgage backs are lean and green, up 8/32’s as we speak. Best reason I can give you for the money flows is that the Employment Report is water under the bridge and traders focus is now back on MENA. Oil up over $1.00 and escalating violence in Libya is back in the driver’s seat. Volatility is back in both bonds and stocks so be careful out there. Take advantage of the rallies as you never know how the next headline will read. We’ll try to wrap this up before we call it a week.
Scotty
Scott Eggen
SVP, Capital Markets
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252
------------------
© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Scotty
Scott Eggen
SVP, Capital Markets
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252
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© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Thursday, March 3, 2011
Market Update - Employment Report for February Preview - 03-03-2011
Once again, it’s time for the high profile monthly Employment Report. Tension seems to be mounting for this one as weekly unemployment figures ratchet lower and the economy starts to show signs of life. Median consensus is as follows:1) Nonfarm Payrolls – Plus 185K2) Unemployment Rate – 9.1%3) Average Hourly Earnings - .2% month on month4) Average Work Week – 34.3 Hours (unchanged)We are of the opinion that this is the first month in some time to create 200K or more new jobs. Not much above consensus but just the same, improving to a number that would start to show less layoffs and slightly more hiring. Goods producing industries will help the cause, estimated to have added 50K or more new jobs. Seems reasonable when looking at the strength within the ISM Manufacturing Index. Services Producing Industries should be the big gainer after a dismal performance last month (plus 23K). We’re looking for this sector to tack on as much as 150K new jobs. Financial Services could be the only loser tomorrow, most likely falling by 10K to 15K. Temporary workers should add about 20K. Throw in a little more hiring here and there and our “guess” is that the number comes in right at plus 200K with the Unemployment rate bumped up to 9.1%. Last month’s free fall on that index was all about people “leaving” the workforce, not new hiring. So what does it mean for mortgage rates? Given today’s selling, we see that most but not all of the pain (if we see 200K) is priced into the market. Remember, we still have a situation in the Middle East/North Africa which is far from stable. We also need to have job growth of 250K per month just to break ever (retirement, etc. leaving versus new hiring). With the 10 year note currently at 3.56%, downside risk is to the old lows (high yield) of 3.62%. Probably hurts mortgage pricing by another .25 to .375 tops on a 200K print. Since we are down ½ point in mortgage backs today, the worse case isn’t bad. If however we travel outside that range, say one standard deviation higher, the payroll print would be 235K to 250K. That would get traders attention and sell the market through 3.62%, probably in route to 3.71% by our chart. You could also see the flip side, just like last month. If that happens, traders would run for cover and buy this market back towards 3.42%, allowing mortgage backs to rally for at least ½ point. Odds though, favor stable to slightly worsening mortgage pricing given economic data of late. We always like to advocate that you get out of the way of this report, lock em’ and sleep better at night. So, what are other saying:1) Wells Fargo – Plus 180K at 9.0% (Wells handicapped last month’s number the closest)2) JP Morgan – Plus 200K at 9.1% (sound familiar)3) Barclays – Plus 200K at 9.0%4) Nomura – Plus 235K at 9.1%5) UBS – Plus 235K at 9.0%6) Bank of America – Plus 250K at 9.2%
As you can see, the spread between high and lows from the big boys is not much. Buckle up and hang on tight. Shootin’ starts at 7:30 am cst tomorrow morning.
Scotty
Scott EggenSVP, Capital MarketsPrimeLending, A PlainsCapital Company18111 Preston Road, Suite 900Dallas, Texas 75252
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© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
As you can see, the spread between high and lows from the big boys is not much. Buckle up and hang on tight. Shootin’ starts at 7:30 am cst tomorrow morning.
Scotty
Scott EggenSVP, Capital MarketsPrimeLending, A PlainsCapital Company18111 Preston Road, Suite 900Dallas, Texas 75252
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© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Wednesday, March 2, 2011
Market Update - 03-02-2011
Handicapping the direction of interest rates has been a challenge of late, one that requires a strong stomach and three charts. The charts needed are for oil, stocks, and the 10 year note. Really, we only need the oil chart as that commodity has been in the driver’s seat. Take today’s trade. Oil (WTI) up nearly $2.00 at $101.50. Brent crude, the type that fuels most of Europe produced in the North Sea/Middle East, is over $117.00 a barrel. Stocks have been down most of the morning. Bonds are off a touch but near unchanged. As oil goes up, stocks fall and bond yields go lower (better mortgage pricing). In a nut shell, that has been the pattern of late. Just to show you how strong the correlation has been, take today’s ADP Employment report estimate for Friday. ADP calls for job growth of 217K, well above expectations. Under “normal” fundamental data released trading environments, stocks would have soared, bonds would have dropped, and mortgage pricing would probably have gotten pinched for .375 to .50. None of the above happened because it’s all about oil. Speaking of oil, just think of how it affects all Americans. A one cent increase at the pumps takes 1 billion in purchasing power out of total consumer dollars available. Don’t know about you but it seems like that one cent has been multiplied by 40 just in the past two weeks. Even Big Joe is complaining about what it will cost him to fill up his boat. Maybe a trade is in his future for one he can paddle! In other news, mortgage applications slipped a little last week, down 6.5%. Fed Chief Bernanke is back on the hill for day two of testimony. He’s in no rush to tighten credit even after QE2 (asset buying) is complete. I think he is in denial about inflation expectations. Maybe he and Charlie Sheen go to the same gym. Currently, the 10 year note is down 2/32’s (yield 3.42%), mortgage backs off 2/32’s, and stocks down 8 points on the big board.
Scotty
Scott Eggen
SVP, Capital Markets
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252
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© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Scotty
Scott Eggen
SVP, Capital Markets
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252
-----------------
© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Tuesday, March 1, 2011
Market Update - Ides of March - 03-01-2011
The Ides of March is the name of 15 March in the Roman calendar. Today, many refer to the entire month as the Ides of March. It is meant to be a festive time dedicated to the God Mars. It is also known as the time that Julius Caesar thought he was bullet proof, only to be stabbed 23 times after not taking the advice of his seer. In a modern observance, Founders Brewing Company has a tradition of releasing Founders KBS beer on the Ides of March. Seems like a great tradition. Construction Spending fell .7% in January to a seasonally adjusted 791.8 billion, off 5.3% year on year. The ISM, Institute for Supply Management, released their manufacturing index. The number crossed the tape at 61.4%, expanding for 19 months in a row to the highest level since May 2004. Things are picking up on the manufacturing front. Gentle Ben is on the hill, testifying before Congress on monetary policy. The text of the semiannual event is available through this link:
www.federalreserve.gov/newsevents/testimony/bernanke20110301a.htm. Treasuries and mortgage backs have been volatile this morning, opening lower (higher yields/worsening mortgage pricing) on the heels of the ISM report, then reversing on Bernanke’s testimony citing deflationary risk negligible, but need stronger growth to sustain recovery. We are settling down during his Q & A with the 10 year note off 12/32’s (yield 3.46%), mortgage backs off 6/32’s, and stocks off 16 points on the big board. Technically, today’s selling has neutralized the chart which points to limited upside (potential to rally). We do not see any huge reversal to worsening pricing but at the same time, put your guard back up and put your defensive mind set back into pipeline management. 10 years ago was my first day at Prime Lending. Kim Bateman and I shared a nice little office that for a few days, no one steped foot in. Let’s just say that my new role with the company was not exactly popular. My first guest was Dave Debowsky who told me that I really wasn’t needed here and should tread lightly, then wished me well and went on his way. The same was true of Scott Drescher, Michael Hott, and others. Change is hard and I understand that. All of the above are good friends and colleagues today. It just took time. Pat Pullen was the first to step inside my prison walls with an issue. Seems as though the loan was going to be snapped away by a competitor and for her to meet the challenge she would pay to close the loan. The loan was approved and set to close so using our smoke and mirrors, we saved the loan and she got paid. One new ally, 300 to go. We closed 60 million that month, a new record at Prime lending. My time here has flown by. Two reasons for that. Tops is the people and we have the best people. Second is that I love what I do and am incredibly lucky to have been given the opportunity by Roseanna, Alan White, and George Mckleskey. Our growth has been phenomenal, both is the maturation of our young people and what we have accomplished within industry rankings. I am especially proud of being involved in the careers and lives of people like Dawn, Shawn F., Joe W., Chris , Mel, and many, many more. I also believe that the best is yet to come for this company, both in people power and scope. We have an opportunity to be the best mortgage company in the business. I plan to end my career here, trying to accomplish just that and I can’t think of a better bunch to do it with that all of your reading this right now. Let’s roll.
Scotty
Scott EggenSVP, Capital Markets
PrimeLending, A PlainsCapital Company
18111 Preston Road, Suite 900
Dallas, Texas 75252----------------© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
Dallas, Texas 75252----------------© 2011 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; IL Dept. of Financial and Professional Regulation- lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender.
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