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Market Watch 02/25/2009

February 25th, 2009 5:19 PM

WEDNESDAY AFTERNOON UPDATE:

The bond market has turned sour as investors again worry about the amount of new debt being sold to fund the stimulus and Fed bailout packages. The stock markets rallied off this morning's lows during early afternoon trading but have since given back those gains to currently stand at this morning's levels. The Dow is now down 80 points while the Nasdaq is down 16 points. The bond market has fallen from this morning's levels to currently stand down 39/32, which will likely cause an upward revision to this afternoon's mortgage rates of approximately .375 of a discount point from this morning's rates.

Today's only economic data was January's Existing Home Sales that showed a decline in home resales of 5.3%. This was much weaker than expected and the lowest level of sales in almost 12 years. That is good news for bonds and mortgage rates, but this data is not considered to be of high importance and unfortunately has not influenced today's rates.

Posted by Mark Hemingway on February 25th, 2009 5:19 PMPost a Comment (0)

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Market Analysis February 24, 2009

February 25th, 2009 10:41 AM

Tuesday's bond market opened in positive territory following news of a plummet in consumer confidence last month and word that the Fed expects it to take a couple of years for the economy to fully recover from the recession. The stock markets showed gains with the Dow. The bond market was up 8/32 at one point Tuesday morning, which improved Tuesday morning's mortgage rates by approximately .125 of a discount point. By mid afternoon on Tuesday, the bond market moved down and erased any improvement in rates and rates actually decreased from most lender's opening rates.

The Conference Board gave us February's Consumer Confidence Index (CCI) late Tuesday morning, showing a reading of 25.0. This was an all-time low and indicates that consumers are still concerned about their jobs and own financial situations. That is expected to mean that they are less likely to make large purchases in the near future, which will limit economic growth. This is good news for bonds and mortgage rates.

Also this morning was Mr. Bernanke's semi-annual testimony on the status of the economy to the Senate Banking Committee. During his testimony he stated that he was optimistic that the recession would end later this year, but that it would take two to three years for the economy to fully recover from it. He also said that restoring financial stability is needed for the economy to recover. None of this is a major surprise but making it official word from Chairman Bernanke gives the markets benchmarks to follow.

More news to follow for Wednesday's news.

Posted by Mark Hemingway on February 25th, 2009 10:41 AMPost a Comment (0)

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