Tuesday - May 27, 9:55 am ET

Current Trend Direction: Sideways

Float/Lock Bias: Cautiously Floating

Current Price of FNMA 4.0% Bond: $105.56, Unchanged

Mixed economic news is helping Mortgage Bonds start the week near unchanged levels.

April Durable Orders rose by 0.8% versus the -1.3% expected, but the gain was due in large part by a spike in military hardware, while bookings for civilian orders were mostly lower. Over in housing, the Case Shiller 20-city Index in March grew at an annual rate of 12.4%, down from the 12.9% recorded annually in February and above the 11.8% expected. Prices rose by 0.9% from February to March.

Later this morning at 10:00am, May Consumer Confidence will be released and could offer some impact. This afternoon at 1:00pm ET, the results from today's $31B 2-year Note auction will be released, which is part of $95 in Notes being sold this week by the Treasury.

The closely watched S&P 500 closed at a record high of 1,900 on Friday and now up a whopping 186% from the low of 666 seen on March 9, 2009, at the height of the Great Recession. The Stock markets have been fueled by rising corporate profits, somewhat positive economic data, a comeback in housing and last but not least, support from the Federal Reserve through its QE programs.

Technically, the 4% coupon continues to be trapped in a sideways pattern, just beneath resistance at the October highs. We are still floating, but cautiously, as prices seem a bit shaky at present levels. Have a great week!

Joe Shamie NMLS # 241432

First Choice Loan Services NMLS # 210764

First Choice Bank NMLS# 177877

866-970-3400 x-5135

jshamie@fcbmtg.com