My New Blog

Here is your weekly update...

With few surprises in the election results, investors focused on the
prospects for the economy. The outlook for economic growth moved
progressively lower during the week, and Friday's weak Employment data
reinforced this view. The reports on manufacturing, construction, and
factory orders released this week showed declines as well. A sluggish
economy is generally consistent with reduced inflationary pressures and
is favorable for mortgage rates, and rates moved lower each day from
Monday through Thursday.

Friday's mortgage market reaction to the weaker than expected Employment
report appeared to be counterintuitive, as mortgage rates rose a little
after the news, offsetting some of the rate improvement seen earlier in
the week. The explanation is that the jobs data was so bad that
investors now expect that another economic stimulus package will be
implemented soon. The government will need to issue even more debt to
pay for a stimulus package, and mortgage investors pushed rates higher
on Friday on concerns about the added supply of debt.

As expected, the Employment report reflected weakness in the labor
market. The economy lost -240K jobs in October, and the figures for
August and September were revised lower as well. This marked ten
straight months of job losses in 2008, bringing the total decline in
jobs to 1.18 million so far this year. The manufacturing and
construction sectors continued to show weakness.

The Economic Calendar will be much lighter next week. Friday's Retail
Sales report will be the only major economic data next week. Consumers
account for about 70% of economic activity, and the Retail Sales report
is a major indicator of spending levels by consumers. Import Prices and
Consumer Sentiment will also be released on Friday. Other than that, the
only report will be the Trade Balance on Thursday. There will be
Treasury auctions on Wednesday and Thursday. Mortgage markets will close
early on Monday and will be closed on Tuesday in observance of Veterans
Day.

Copyright @ 2008 MBSQuoteline

Stay Healthy and Stay Positive!
Christina