9/02/16 Reports not as good as expected

September 2nd, 2016

What Is Going On With Interest Rates?  #wigowir

When the price of Mortgage Backed Securities (MBS) on the Chart above goes down rates go up, and when the price goes up rates come down. Chart was posted at 11:01 am. All times are Eastern Standard. Currently Mortgage backed securities are trading at $103.62 down 3 basis points from yesterday’s close, and below the 50 and 25 day moving average.  The long wicks on the candle shows that the trading has been volatile today.  Currently we are pretty much the same as we were at the close yesterday.

Commentary 11:01 am: The following is the Employment Report for August that was released this morning at 8:30 am ET.

Report                        Estimate        Actual       Prior

Non-Farm Payrolls     180,000       151,000      255,000

Hourly Earnings             0.2%            0.1%         0.3%

Unemployment rate       4.8%           4.9%          4.9%

Average work week        34.5            34.3            34.5

Labor Force Participation 62.8% http://www.cnsnews.com/news/article/susan-jones/94391000-not-labor-force-labor-force-participation-stuck-628

The labor force participation rate is the percentage of people in the civilian noninstitutionalized population, age 16 or older, who are either working or actively seeking work. People who are no longer looking for work, for whatever reason -- retirement, school, family, or they've just given up -- are not participating in the labor force.

Feel free to call (205-266-5669) or email (jmarbury@nationalbankofcommerce.com) John for a quote based on the terms of you loan.

8:34 AM ET New Rates have been posted

30-Year Fixed 3.375% (3.457% APR) No Origination Fee  

15-Year Fixed 2.750%   (2.892% APR) No Origination Fee

7-1 ARM 30 year 3.000% (3.341% APR) No Origination Fee

For more rates and details click: http://www.johnmarbury.com/page5.html/

  • 30-Year Fixed-Rate Mortgage: The monthly payment on a $200,000 30-year Fixed-Rate Loan at 3.375% and 70% loan-to-value (LTV) is $884.19 with 0 points due at closing. The Annual Percentage Rate (APR) is 3.457%. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply.
  •  15-Year Fixed-Rate Mortgage: The monthly payment on a $200,000 15-year Fixed-Rate Loan at 2.750% and 70% loan-to-value (LTV) is $1357.24 with 0 points due at closing. The Annual Percentage Rate (APR) is 2.892%. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply.
  • 7-1 30 year ARM for $200,000 with an Initial Interest Rate of 3.000% (3.334% APR) your monthly payments for years 1 – 7 would be $870.41 and for years 8 -30 monthly payments would be $886.87 (based on the current Index  of  1.210% Plus Margin of 2.25% to $417,000 and 2.5% to $900,000).  Monthly payments do not include taxes and insurance and the actual payment obligation will be greater.  Your variable interest rate is subject to a floor of your Initial Interest Rate.  Your variable interest rate can increase or decrease after the seventh year by 2 percentage points annually and can increase 4 percentage points over your Initial Interest Rate over the term of your loan.  The index for this loan program is the average of the interbank Offered Rates for One Year Denominated Deposits in the London Market (LIBOR)

Below is the news when it happened and the market’s reaction.  All Times are Eastern Standard Time. 

8:44 AM - Fed Fund Futures now show just a 12% probability to a hike in the Fed Funds Rate at this month's FOMC meeting. S&P futures edge into positive territory as interest rate hike chances ease.

Fri, Sep 02 8:39 AM - Average hourly earnings +0.1% vs the 0.2% expected.

The Unemployment Rate remains at 4.9%.

MBS edge higher after the weaker-than-expected jobs data, but the gains are modest.

June and July saw a net revision of -1K for Non-farm Payrolls.

August Non=farm Payrolls 151K vs the 180K expected.

8:15 AM - U.S. dollar index 95.69, +0.03.

The 10-yr T Note yield at 1.58%.

WTI oil $43.59/barrel, +$0.44.

It is expected that 180K jobs were created in August.

MBS open near unchanged while S&P futures hover near the flat line ahead of the 8:30 a.m. release of the August Jobs Report.

Contact

John Marbury
jmarbury@nationalbankofcommerce.com
NMLS# 740833
Phone:205-266-5669
Fax: 866-217-4174

813 Shades Creek Parkway
Birmingham, Alabama 35209
 

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