News for Prescott AZ - AmericanTowns.com

Monday, October 18, 2010

Inside Lending Newsletter From Theron Wall

Inside Lending from Theron Wall

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Theron Wall

Theron Wall
Branch Manager
3615 Crossings Dr, Suite A
Prescott, AZ 86305
Phone: (928) 778-7167
Mobile: (928) 533-7473
Fax: (928) 445-5308

Wallick & Volk Mortgage

For the week of October 18, 2010 – Vol. 8, Issue 42

>> Market Update 

INFO THAT HITS US WHERE WE LIVE  Mortgage rates, already at historically low levels, have been sliding even further the last few weeks. Nonetheless, the Mortgage Bankers Association's Weekly Mortgage Applications Survey showed purchase applications down a bit from the week before.

But happily, applications for conventional purchase loans are actually at their highest level since the start of May, following the home buyer tax credit expiration on April 30. Of course, with today's super low rates, demand for refinancings are also up -- a healthy 24% over the week before, with refinance application volumes now close to their highest level all year.

>> Review of Last Week

ANOTHER WEEK UP... Yup, the stock market maintained its steady cruise upward, begun in September and continuing now for the first two weeks in October. Investors on Wall Street seem to be staying in positive, if cautious mode. The economy sends mixed signals, but stocks push relentlessly upward. All three major market indexes were up for the week, with the tech-heavy Nasdaq leading the pack, delivering a very strong 2.8% gain, helped by good Q3 numbers from Intel and Google!  

On the negative side, the trade deficit expanded by $3.8 billion in August to $46.3 billion, which was larger than anticipated. New claims for unemployment insurance also increased by 13,000. Continuing claims, however, dropped to their lowest level in almost two years, but it's unfortunately still a big number, at 4.399 million. Wholesale inflation inched ahead a bit, with the Producer Price Index up 0.4% in September and up 4.0% compared to a year ago. This, of course, isn't great, although worries about deflation should be less in the headlines.

For good news, we saw consumer inflation stay well under control, with consumer prices edging up just 0.1% in September. This was less than expected and up only 1.1% versus a year ago, well within the Fed's guidelines. Core consumer prices, which leave out food and energy, were unchanged for the month. These steady prices may be why retail sales were up 0.6% for the month, better than expected and giving evidence the consumer is trying to help the recovery. 

For the week, the Dow ended UP 0.5%, to 11062.78; the S&P 500 was also UP 0.9%, to 1176.19; and the Nasdaq was UP 2.8%, to 2468.77.


It was a volatile week in the bond market, but prices held up well enough in certain areas. The FNMA 30-year 4.0% bond we watch ended down just 6 basis points for the week, closing at $103.00. Freddie Mac's weekly survey showed national average mortgage rates for most mortgages trickling lower for another week, staying at historically low levels. 

>> This Week’s Forecast

BUILDING PRODUCTS, BUILDING HOMES...This week's economic reports begin and end with manufacturing readings, which are expected to still show a slow recovery. Monday's Industrial Production and Capacity Utilization are expected to stay flat for September. Thursday we get the Philadelphia Fed Index of the state of manufacturing in that region, forecast to nudge up into positive territory.

In addition to building products, we'll also get a look at building homes. Tuesday's September Housing Starts should be down a bit from August and still hovering at a modest rate below 600,000. September Building Permits, showing how builders are feeling further out, are expected to be slightly under the Housing Starts number, indicating still cautious attitudes in that industry. 

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of October 18 – October 22

 Date

Time (ET)

Release

For

Consensus

Prior

Impact

M
Oct 18

09:15

Industrial Production

Sep

0.2%

0.2%

Moderate

M
Oct 18

09:15

Capacity Utilization

Sep

74.8%

74.7%

Moderate

Tu
Oct 19

08:30

Housing Starts

Sep

575K

598K

Moderate

Tu
Oct 19

08:30

Building Permits

Sep

565K

569K

Moderate

W
Oct 20

10:30

Crude Inventories

10/16

NA

–0.416M

Moderate

Th
Oct 21

08:30

Initial Unemployment Claims

10/16

455K

462K

Moderate

Th
Oct 21

08:30

Continuing Unemployment Claims

10/9

4.400M

4.399M

Moderate

Th
Oct 21

10:00

Leading Economic Indicators (LEI) Index

Sep

0.3%

0.3%

Moderate

Th
Oct 21

10:00

Philadelphia Fed Manufacturing Index

Oct

1.4

–0.7

HIGH

 

>> Federal Reserve Watch   

Forecasting Federal Reserve policy changes in coming months  With Fed chairman Ben Bernanke last Friday all but promising a second round of quantitative easing (QE-2), economists do not expect the Fed Funds Rate to move off its rock bottom level for quite some time. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on:

Consensus

Nov 3

0%–0.25%

Dec 14

0%–0.25%

Jan 26

0%–0.25%


Probability of change from current policy:

After FOMC meeting on:

Consensus

Nov 3

     <1%

Dec 14

     <1%

Jan 26

     <1%

 

This e-mail is an advertisement for Theron Wall. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is the property of Wallick & Volk Mortgage and cannot be reproduced for any use without prior written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer distribution. The material does not represent the opinion of Wallick & Volk Mortgage. BK 0018295 NMLS #256412


Equal Housing Lender  

 

This is not the opinion of Brad Bergamini, Realty Executives Northern Arizona or any of its affiliates.  This post is for informational purpose only and is not guaranteed and does not render as legal advice.  Buying and selling Real Estate in Arizona or Prescott Arizona is a serious task and should be consulted with personally with Realtor or Real Estate Attorney.  Please visit my website for contact information

http://bradbergamini.com or http://everythingprescott.com

 

 

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