Loan Biz Blog

Early selling took bonds, notes, and MBS to the bottom of the range. The move was technical in nature, finishing the bearish trend that started yesterday. Since the first hour of trading, the market has crept back towards unchanged, primarily on weak stocks (Dow off 57 points). No economic news today but plenty to chew on as stocks face a quadruple witching day (options expiration) and the country braces for a Sunday vote on Obama Care. We see the health care vote as net positive for mortgage rates/pricing. In our opinion, stocks will get punished whether the vote is yes or no. A yes vote adds to the deficit along with additional taxes to dividends, capital gains, and personal income. The market will not like that. A no vote will provide further evidence of grid lock and the notion that the Dem’s will regroup and continue to push the issue. The market hates uncertainty. Although a stock market correction looks to be in the cards, that support will be challenged due to Treasury auctions totaling 118 billion (Tues – Thursday). Once again, the market is a mine field so be careful out there. Currently, the 10 year note is up 3/32’s (yield 3.66%), mortgage backs unchanged, and stocks down 57 points on the big board. Some investors are re-pricing for the better as their early bird levels reflected MBS off 4/32’s. We priced with the market unchanged, giving you the advantage of the early market reversal. With so many cross currents in the works; Health Care, Fed MBS purchase program ending, 118 billion of new auction paper, squirrely stocks, never ending sovereign debt issues, and month/quarter end, price action is a tough one to handicap

With Permission & Courtesy of Scott S. Eggen
Senior Vice President – Capital Markets

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Sam Cowen, NMLS ID#: 176693
Branch Manager, Lending in 47 States
PrimeLending | a PlainsCapital Company
2007 N Collins Blvd Ste 403 Richardson, TX 75080
Email: 888@MrLoanBiz.Com Web: www.MrLoanBiz.Com
Toll Free: (888)MR-LOAN-BIZ (888) 675-6262 Toll Free Fax: 866-908-2611