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.           Thursday’s bond market has opened in positive territory following relatively uneventful economic data and early stock weakness. The major stock indexes are starting the new year off with noticeable losses, pushing the Dow lower 89 points and Nasdaq lower 29 points. The bond market is currently up 4/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point over Tuesday’s morning pricing. All of the U.S. financial and mortgage markets were closed yesterday for the New Year’s Day holiday. There were two pieces of economic data posted this morning that were relevant to mortgage rates. The first came at 8:30 AM ET when the Labor Department gave us last week’s unemployment figures. They announced that 339,000 new claims for unemployment benefits were filed last week, down slightly from the previous week’s revised total of 341,000. Analysts were expecting to see 333,000 initial claims filed, indicating that the employment sector was a little weaker last week than many had thought. That makes the data favorable for the bond market and mortgage rates. Unfortunately, since this data tracks only a single week’s worth of new filings its impact on the financial markets and mortgage pricing has been fairly minimal. At 10:00 AM ET this morning the Institute for Supply Management (ISM) posted their manufacturing index for December. It came in at 57.0, nearly matching forecasts of 56.9. That was a slight decline from November’s 57.3, meaning manufacturer sentiment on business conditions slipped last month. Ideally, the bond market would prefer to see a larger decline, but the lack of further strength makes the news neutral-to-slightly positive for mortgage rates. Tomorrow has no relevant economic data scheduled for release but there are a handful of speaking engagements from current Fed members. The most recent schedule shows the first at 10:15 AM ET and the last at 2:30 PM ET. None of them are considered to be highly important or likely to be market-moving, but whenever they speak publicly, particularly the Fed Chairman, their words have the potential to influence the markets. Chairman Bernanke is expected to speak in Philadelphia at 2:30 PM ET, so the best chance to see a noticeable reaction will come during afternoon trading. If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float 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