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Joe Shamie

Market Update 11:30 AM ET

Thursday, May 22, 2014 - Article by: Joe Shamie - First Choice Loan Services - Message

Thursday - May 22, 2014, 11:30 am ET

Current Trend Direction: Sideways to lower

Float/Lock Bias: Floating

Current Price of FNMA 4.0% Bond: $105.59, +3bp

There were less working men in the latest week as the Labor Department reported that Weekly Initial Jobless Claims rose by 28K to 326K versus the 305K expected. Overall, the labor market continues to limp along and yesterday the Fed, rightly so, expressed concern about the long-term unemployed. This bad news was of course good news for Bonds and gave prices a boost early on.

Fannie Mae released its May 2014 Economic and Housing Outlook yesterday saying, "The housing picture remains more worrisome, with existing home sales, new home sales, housing starts, and multifamily housing all experiencing year-over-year declines despite improving consumer attitudes." Fannie went on to say that it anticipates a modest uptick in housing activity as the spring and summer selling seasons get underway, but sees 2014 as a bump in the long-term road back toward normal levels. As goes Housing goes the broader economy, lets hope this is indeed just a bump in the road. Time will tell.

As the holiday weekend draws near, trading volumes will decline further as traders look to get an early jump on the long weekend. Prices are right at resistance seen at the October highs. We are still floating with a finger on the lock trigger. Should the Bond convincingly bust above this overhead resistance, we will likely see rates move another leg lower. Remind clients that for rates to move lower, things have to get worse or uncertain so lets be careful what we wish for.

Joe Shamie NMLS # 241432

First Choice Loan Services NMLS # 210764

First Choice Bank NMLS# 177877

866-970-3400 x-5135

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