Tuesday!
Investors were amazed as the bond market appeared to Yo-yo today. At one point on the FNMA 4.5% coupon we were down 34 basis points...
FNMA 4.5% actually closed down just 3 bps on the day.
The "producer's price index" came out today showing mild inflation...which was "worse" than expected though so the market reacted. Inflation is bad for both bonds and stocks as it drives money into investments that get more value with inflation.
What is it? The "Producer's Price Index" or "PPI" shows what the cost of a "set" of goods to produce was in a given month vs. the last time the report was looked at. This is the report looking at "producers" so these costs may or not be passed down to the consumers. (Producers either operate with less profit or create efficiency to absorb the higher costs.)
The FLIP side...after investors heard news that was traditionally "anti-stock-bond" was a better than expected "Empire State Manufacturing Index." This showed that manufacturing was UP and suggests good news.
Consumer spending is also UP with consumer confidence for August. This has been good for the DOW. DOW was up 56 points to a new 2009 HIGH.
Have a great eve!
Chad
P.S.
Request!
My processor Kerensa is working on becoming a licensed e-decision Underwriter. WE are looking for FHA loans for her to underwrite to meet the criteria necessary for her to be fully licensed by November 1st. Please let me know if we can help you with any FHA, VA or Conventional financing!
Chad
