Beware of "profit taking" tomorrow with the recent gains in mortgage backed securities. (Profit taking is when an investor will sell to preserve the profit earned on investments...the FNMA 4% is up about 69 cents from last Thursday.) Profit taking can erode pricing as there is a rush of people "selling". Remember the old supply and demand? Sellers=supply. A rush of sellers with the same amount of demand=eroded value.
YIKES Unemployment initial claims went up 32,000 to 679,000 this week. About 6.79 MILLION people are on continuing unemployment right now... Remember that MANY of these unemployment claims are from people who were cut from full-time to part-time employment. Many have fingers crossed for the massive stimulus spending on the block...but that spending is not scheduled to create any jobs at the street level until mid-2010. Many analysts are predicting a turn around by then.
Dow is up 46 points...and in the 8300 point range.
Feds purchased 27 BILLION in Mortgage Backed Securities last week. They are buying coupons in the 4-6% range... No word yet on an "exit strategy" from this purchasing and when that news comes: watch for rates to react.
Consumer Sentiment report along with some manufacturing and inflation indicator reports are coming out tomorrow. It could be a BIG day with some wild swings in the markets.
Many of you have already heard that the FEDS approved the use of the $8000 tax credit for down payments. This could be great news for some and hopefully will encourage more buyers to get of the couch...and do something. There is plenty of info out there on this...if you would like more clarification: let me know.
Have a great evening and a super Friday tomorrow.
