Market Update 3/31/09

In light of the recent price improvement in Mortgage Bonds, we have now switched our focus back to the FNMA 30-year 4.0% Bond.  This change is reflected on the Bond Page and text messaging.

Mortgage Bonds are trading slightly higher so far this morning, and Stocks are looking to rebound after yesterday’s sell off.

Interesting note that supports our views on the unlikelihood of rates moving much lower – last Friday, Jack Koskinen, interim chief executive of Freddie Mac, said that home loan rates are near the bottom and that any further decreases will be small.  Mr. Koskinen commented on mortgage rates after he attended the meeting between President Obama and the CEO’s of the financial services companies on Capitol Hill.  Perfect opportunity to get the word out to clients who are sitting on the fence waiting for that 4% rate…now is the time to purchase or refinance as rates are at historically low levels, and not likely to move much lower.

The Chicago Purchasing Managers Index (PMI) came in slightly lower than anticipated, actually registering the worst number in 29 years.  The manufacturing sector continues to struggle, but Bonds did not have much reaction to the release.  Consumer Confidence arrived at 26.0, an improvement over last month’s read but a bit lower than expectations of 28.0.

Speaking of confidence, the auto industry is taking a swing at gaining customer confidence this morning on the heels of President Obama’s rejection for providing further aid.  GM announced their Total Confidence program, designed to help financially challenged borrowers with incentives like helping cover monthly payments for a period of up to 24 months.

For now, we will continue to float.

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