Mortgage Rates Steady

Bond and mortgage prices are not moving much this morning even with a slew of economic releases this morning. The final Q3 GDP was better than anticipated and from the previous reading last month.  Old data but Q3 was better, the current expectations for Q4 is currently expected at +2.6% according to the latest Atlanta Fed GDP Now (later today the GDP Now will be updated). Weekly jobless claims a little concerning; expected at 256K +2K increased 21K to 275K; the 4-week average increased to 263.75K from 257.75K. Claims the highest in six months going back to June but still under the 300K level that would be a concern. The preliminary November durable goods orders declined more than what was forecasted. Capital goods orders excluding aircraft, a closely watched proxy for business spending plans, increased 0.9% after gaining 0.2% in October. Prior to the data, the 10yr was at 2.53%, MBS prices -5 bps. The reaction sent the 10yr to 2.57% and MBS prices into the negative.

Later we got the October FHFA home price index, which even with this being old data, still affirms home prices on the increase. The final data just released in the last hour saw November personal income and spending not hit the numbers anticipated. The weaker income and spending is adding a minor level of support but with bearishness level high, I do not expect much improvement.

Currently at 11:00AM, we have the 10yr at 2.55% and MBSs even.

By noon today volume will slow as traders and investors close down for the Christmas holiday. Tomorrow the bond market will trade until 1:00 but it will be mostly just watching. Markets will be closed on Monday in observance of Christmas. Talking with several our clients, most will be closed tomorrow and also Monday.  I will have a report tonight, and just summarize everything going into the weekend – but I do not anticipate anything to happen.

Media still frothing about DJIA 20K - not happening now but it will not be long before it breaks that level. Stock indexes now are lower on the day. 

I WANT TO WISH YOU ALL A VERY MERRY CHRISTMAS AND HAPPY HOLIDAYS, AND THANK YOU FOR YOUR CONTINUED INTEREST IN MY DAILY REPORTS.

Bart Castelli (aka The Godfather)