Monday, May 12, 2014 - Article by: Joe Shamie - First Choice Loan Services -
May 12, 2014, 10:35am ET
Current Trend Direction: Topped out, sideways
Float/Lock Bias: Short term locking, days to a few weeks
Current Price of FNMA 4.0% Bond: $104.69, -19bp
After last week's decline, Mortgage Bonds continue to drift lower this morning as Stock prices rise. The Dow Jones Industrial Average closed at a record 16,583.34 on Friday, while the S&P 500 eyes a fresh record high in today's session.
In the global printing press categoryword that China may support its Stock markets to bolster growth sparked an overseas rally and the good vibes have spilled over into US Stocks. What we find fascinating is the Fed has pumped up asset prices here in the US for 6 years and economic growth is a 2%. Isnt doing the same thing over and over and expecting a different result the definition of insanity? Well insane it is and as we wrote last week, there may be a higher price to pay later on down the road for trying to shelter the markets from a bad reaction now.
There are no economic reports due for release today, but the rest of the week's calendar is on the heavy side with readings on housing, inflation on the consumer and wholesale level and manufacturing. There are no Note or Bond auctions this week.
If you are looking in the short-term, days and weeks, the trend is lower. If you are looking longer-term, weeks and months, the trend is sideways at worst. So short-term, consider locking otherwise float.
Have a great week!
Joe Shamie NMLS # 241432
First Choice Loan Services NMLS # 210764
First Choice Bank NMLS# 177877
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