Here is What the Market is Doing Today

Here's some great information that I received today from Biran Fedderke at National City Mortgage. I found it very informative and thought you'd like it too. If you have questions his contact information is at the bottom.


HERE IS WHAT THE MARKET IS DOING TODAY
Current Trend Direction: Sideways to Lower
Risks favor: Floating with prices just above support
Current Price of FNMA 4.5% Bond: $100.22, -9bp
The unemployment line is getting even longer...Initial Jobless Claims rose 36,000 last week to 667,000, worse than the 625,000 expected and the highest level since October of 1982. The number of people collecting benefits reached a record high, rising 114,000 to 5.11 million.
New Home Purchases dropped 10.2% to an annual pace of 309,000 versus estimates of 324,000, the lowest level since data collection began in 1963. The median price decreased 13.5% to $201,100, the most in almost four decades. The number of new homes for sale at the end of the month fell 3.1% to 342,000. The supply of homes at the current sales rate surged to a record 13.3 months' worth.
Durable Goods Orders fell for a sixth straight month both domestically and from foreign demand as the global recession marches on. Orders for Durable Goods, from washing machines to airplanes, fell 5.2% in January versus estimates of a 2.5% drop. After excluding transportation orders, durables dropped 2.5% when estimates were looking for a loss of 2.2%.
General Motors posted an enormous and larger than expected $9.6B loss for the 4th quarter. Even after a stiff round of bad economic news and sour corporate earnings, Stocks are showing some resiliency and are trading higher.
More paper - another round of government auctions this afternoon in the form of $22B 7-yr Notes. Yesterday's $32B offering didn't go over that well and the $94B total hitting the market this week has weighed on the entire Bond Market.
We are switching to a Floating bias, after maintaining a locking stance for the past couple of weeks. Prices are trading just above support at $100.12, a level that has served as a good floor in recent weeks. Should prices fall beneath $100.12, the Bond could easily drop another 60bp or so to the next clear floor of support - in which case you will be hearing from us.

Brian L. FedderkeMortgage Loan ConsultantNational City Mortgage, a division of National City Bank701 N. Perry St.Locator 09-3193Napoleon, Ohio 43545
1-800-528-5245 Toll Free419-592-7842 office phone419-769-3102 cell phone877-804-4544 direct faxEmail address: Brian.fedderke@ncmc.comAPPLY on line at www.ncmc.com/brianfedderke
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