Wednesday, April 1, 2015 - Article by: Bart Castelli - Homestar Financial Corporation NMLS #70864 -
It was another good day for making money and floating. Mortgage rates fell again today at a faster pace than seen in the last few days. The data this morning was weak, as has been most data in the last month. ADP job growth was off, March ISM manufacturing index was soft, and now the numbers I am hearing for Friday's employment data is non-farm jobs at 200K from 247K that was originally estimated.
No progress with Iran nukes - surprise! Kerry will remain in Switzerland until at least Thursday morning to continue talks on Iran's nuclear program. Think he will walk away tomorrow? Meanwhile Iran is arming rebels in Yemen, and Yemen is now saying enough. The region everyday moves closer to one day a regional war will occur, hopefully after I retire, but the US and other global leaders are continuing to the ostrich thing.
Tomorrow weekly jobless claims are expected up and February factory orders are expected flat in the month after declining in January. Still in the time frame that allows bulls to diss any weak data due to weather. The dollar a little stronger against the euro and yen today, nothing substantial though.
Want the waterboarding treatment? Listen all day to CNBC as they continue to bring on guests that opine on the Fed and the increase in rates. Evenly divided now, it is 50/50 that an increase will happen this year or not.
With employment Friday, tomorrow may see a little selling but will not change our strong bullish outlook. Any weakness in jobs compared against what markets are thinking will likely immediately drive the 10yr yield to our next resistance target at 1.70%, meanwhile at 1.86%, the low today, hit the current technical resistance. MBS prices also looking good. The US stock market is poised for a major pull-back - all that is needed now is a soft employment report on Friday. March, February and January economic performance has slowed and we expect corporate earnings will be soft in Q2.
In summary, from today until Friday we are in a high risk high reward realm. Technical levels are super important as we are trading at the bottom of the recent range. Floating into the next couple of day's data for loans closing within 15 days is oblivious. Loans closing within 15-30 should strongly consider locking. Loans with 30-45 day closing time have a bit of flexibility, but with near multi-year lows on rates we should not be greedy. You know what I have said in the past here, Pigs Get Fat Hogs Get Slaughtered. It is your choice on how you want to handle this.
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