Weekly News Letter Markets in turmoil

By
Real Estate Mortgage Broker with West Town Savings Bank

Week of
August 7,
2011
Mortgage
Market
Commentary
Unless you’ve been hiding in a cave, you’ve probably seen the tumultuous financial news over the last
week. While the world watched, the US government extended its borrowing authority, and there was
a collective sigh. Before everyone caught their breath, the US stock markets went into a freefall.
Global money managers poured cash into US Treasuries, driving mortgage rates downward in a hurry.
Then the Labor Dept. announced a greater-than-expected increase in jobs, and markets began to
recover, with rates moving back upward quickly. Financial markets closed on Friday, but the
financial news continued to flow, with S&P downgrading the US debt for the first time in history.
Opinions are extremely varied as to what will happen with interest rates and in financial markets this
week. The truth is that we don’t know. We are in new territory in the financial world. The Fed meets
this week, and the world will be scrutinizing its policy announcement. Mortgage rates could easily go
either way this week, with the potential for big swings in any direction.
Mortgage Rates
2.75%
3.25%
3.75%
4.25%
4.75%
5/19 6/2 6/16 6/30 7/14 7/28
30Yr 15Yr 1Yr ARM
Dow Jones
11,250.00
11,500.00
11,750.00
12,000.00
12,250.00
12,500.00
12,750.00
12-May 26-May 9-Jun 23-Jun 7-Jul 21-Jul 4-Aug
This Week’s Top Economic Reports and Events
Mortgage Rate Interest Rates and Indexes
Trends 1 Yr T-Bill 0.210% 11th D. COFI 1.338%
Short-Term 􀃎􀃎 10 Yr T-Note 2.970% COSI 2.210%
Long-Term 􀃎􀃎 6 Month Libor 0.443% CODI 0.266%
Volatility High Prime Rate 3.250% MTA 0.243%
Historical Rates
0.00
3.00
6.00
9.00
Aug-06 Aug-07 Aug-08 Aug-09 Aug-10
1 Yr CMT MTA COFI
CODI Prime
Jon M. Starr 10 Year Treasury Note Trend
198 Route 9, Manalapan, NJ 07726
732-361-4923 􀁹 203-803-6433 Cell
jstarr@westtownsb.com
2.25
2.50
2.75
3.00
3.25
3.50
12-May 26-May 9-Jun 23-Jun 7-Jul 21-Jul 4-Aug
10 Year Treasury Note 20 Day Moving Ave
Report/Event Date Prior Est. Impact
FOMC Policy Announcement 8/9 Significant
All eyes will be on the announcement. Indications of a QE3 in the works
will likely create some rate stability with a little downward pressure.
Weekly Jobless Claims 8/11 400K 409K Limited
After last week’s relief in the Employment Report, a drop below 400K
would likely generate some upward pressure on mortgage rates.
International Trade Balance 8/11 -50.2B -48.0B Limited
A larger-than-expected drop in the trade gap would revise GDP upward,
and mortgage rates might experience some limited upward pressure.
Retail Sales 8/12 0.1% 0.5% Significant
The sales number will lay heavy on the market this month, and a largerthan-
expected increase could help drive rates upward.
U of Mich. Consumer Sentiment 8/12 63.7 62.5 Moderate
If Retail Sales come in short and Sentiment drops more than expected,
mortgage rates will likely experience some downward pressure.

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Location:
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Tags:
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