Daily market commentary

Greetings! Here's your Daily Commentary report compliments of Alan Russell & Princeton Capital! Call me today for current rates and market information at (650) 947-2296.         Wednesday’s bond market has opened in positive territory ahead of today’s Fed meeting. The stock markets are calm as they wait for this afternoon’s news also with the Dow and Nasdaq just a point or two from yesterday’s closing levels. The bond market is currently up 5/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point. This morning’s only relevant economic data was September’s Consumer Price Index (CPI) at 8:30 AM ET. The Labor Department announced that the overall CPI reading rose 0.2% while the more important core data rose 0.1%. The overall reading was slightly higher than expected but the core reading that carries the most weight pegged forecasts, indicating no surprise inflationary pressures at the consumer level of the economy. That means we can consider the data neutral for the bond market and mortgage pricing. Yesterday’s 5-year Treasury Note auction actually went very well with several benchmarks pointing towards a strong level of investor demand. That allows us to remain fairly optimistic about today’s 7-year Note sale that has a term that is closer to mortgage-related bonds than yesterday’s auction. Another decent sale should help boost bond prices across the board, possibly leading to a slight improvement in mortgage rates early this afternoon. Results will be posted at 1:00 PM ET. However, traders will be much more focused on today’s FOMC meeting adjournment at 2:00 PM ET. It is widely expected that Chairman Bernanke and friends will leave key short-term interest rates alone and the general consensus is that they will not reduce the amount of monthly bond purchases at this meeting either. Although, analysts and traders will certainly be looking at the post-meeting statement for an indication of when they may start tapering and if the Fed feels the government shutdown earlier this month had a noticeable impact on the overall economy or altered their economic and/or interest rate predictions. Look for an update to this report shortly after the markets have an opportunity to react to the adjournment and statement. If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now...       Alan Russell 161 South San Antonio Rd. | Los Altos, CA 95022 Ph: 650-947-2296 | Fax: 408-335-1118 alanrussell@princetoncap.com CLICK HERE TO STOP RECEIVING OUR REPORT