Mortgage Pros, Inc.

Gross Domestic Product Rose at a 3.2% 1Q10, softer than the 3.3% expected and marked a drop from a 5.6% surge at the end of 2009. A bid positive is that consumer spending accelerated 3.6% as opposed to 1.6% in the 4Q. The core inflation rate — which excludes food and energy prices — increased 0.6% in the first quarter, after rising 1.8% in the fourth quarter. Federal Reserve officials watch this gauge and define their statutory goal of price stability as core inflation of 1.5% to 2%. The 0.6% increase was the lowest reading since a flat reading in first-quarter 1959, suggesting the Fed will likely continue to keep interest rates near zero.
Employment Cost Index rose 0.6% in 1Q10, as benefit costs climbed by the most since 2007. The rise in the employment cost index followed a 0.4 percent gain in the final three months of 2009.
Institute for Supply Management-Chicago Business barometer rose to 63.8 this month, the highest level since April 2005, from 58.8 in March. and marking its seventh month of growth. All Business Activity indexes signaled expansion for the second consecutive month.
The Reuters/University of Michigan Consumer Sentiment Index dropped to 72.2, higher than forecast, from a reading of 73.6 in March. The gauge was projected to fall to 71 from a month earlier.
Treasury 10-Year Notes Head for Their First Monthly Increase Since January Treasury 10-year notes headed for their first monthly gain since January as Greece’s fiscal crisis renewed demand for the safest government securities even as the U.S. economic recovery shows signs of accelerating.
Bond Rally Teeters as Yield Spreads Expand, Offerings Slow: Credit Markets The record rally in corporate bonds is showing signs of cracking, with yields rising the most in 13 months relative to government debt and new sales falling to the lowest level this year.
Greek Bonds Climb Amid Increasing Speculation EU-IMF Bailout to Be Granted Greek bonds rose, leading gains in Europe, on speculation the country will get as much as 120 billion euros ($159 billion) in a European Union-led bailout, buying the government time to tackle its budget deficit.

Economic Indicator News Release Calendar for the weeks ahead

Friday, April 30
United States
Date Value Consensus Forecast Previous
8:30 AM Employment Cost Index 2010Q1 n/a n/a 0.5%
8:30 AM GDP 2010Q1 n/a n/a 5.6%
8:30 AM ISM – NY Report April n/a n/a 423.2 index
9:45 AM ISM-Chicago April n/a n/a 58.8
10:00 AM University of Michigan Consumer Sentiment Survey April 84.0 76.0 73.6
10:30 AM ECRI Weekly Leading Index 4/23/2010 n/a n/a 131.9
3:00 PM Agricultural Prices April n/a n/a 4.4%

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S&P/Case-Shiller Home-Price Index Increased 0.6% from February 2009, the first gain since December 2006. Home prices in February were 30% below the peak reached in July 2006, indicating the industry that helped trigger the worst recession since the 1930s will take years to recover lost ground. The year-over-year gauges therefore provide better indications of trends in prices. Eleven of the 20 cities in the index showed a year-over-year decline, led by a 15% drop in Las Vegas and a 6% decrease in Tampa. San Francisco showed the biggest year-over-year increase, with prices rising 12%. Compared with the prior month, 19 of the 20 areas covered showed a decrease on an unadjusted basis, led by Portland, Oregon, and Minneapolis. San Diego showed the only monthly increase.
The Conference Board Consumer Confidence Surged to 57.9 in April, up from 52.3 (revised from 52.5), and moving to a new cyclical high after plunging in February because of bad winter weather. The expectations component led the previous decline and March gain, jumping to 77.6 from 70.4 (previously 70.2). The present situation component rose to 28.6 from 25.2 (previously 26). Improvement was again widespread across survey questions, although the income outlook remains weak.
Treasuries Advance on Speculation Greek Sovereign Debt Crisis Will Spread Treasuries rose on concern that Greece’s fiscal crisis may spread to Europe’s other indebted nations, boosting demand for the safest government securities.
Fed `Squeezed’ by Strengthening Recovery May Maintain Pledge for Low Rates Federal Reserve officials may indicate the U.S. recovery is strengthening while avoiding any signal of a change in monetary policy by saying interest rates will remain near zero “for an extended period.”
Ginnie MBS Volume Off Nearly 50% Since December. Issuance of Ginnie Mae mortgage-backed securities fell 24% to $22.8 billion in March with consumers taking a more cautious approach to the housing market. It marks the third monthly decline in Ginnie MBS issuance, which is down 46% from December. Issuers used Ginnie Mae execution in March to securitize $22 billion of government-guaranteed single-family loans and $828 million of multifamily loans. Issuance of MBS backed by FHA-insured reverse mortgages totaled $751 million, down from $1.45 billion in February.

Economic Indicator News Release Calendar for the weeks ahead

Tuesday, April 27
United States
Date Value Consensus Forecast Previous
7:45 AM Chain Store Sales Snapshot 4/24/2010 n/a n/a 2.1%
9:00 AM S&P/Case-Shiller® Home Price Indexes February n/a n/a -0.7
10:00 AM The Conference Board Consumer Confidence April n/a n/a 52.5
10:00 AM Richmond Fed Manufacturing Survey April n/a n/a 6
5:00 PM ABC News/Washington Post Consumer Comfort Index 4/25/2010 n/a n/a -43

Wednesday, April 28
United States
Date Value Consensus Forecast Previous
7:00 AM MBA Mortgage Applications Survey 4/23/2010 n/a n/a 536.3
10:30 AM Oil and Gas Inventories 4/23/2010 n/a n/a 356.2 mil barrels
2:15 PM FOMC Monetary Policy April n/a n/a 0.0-0.25%

Thursday, April 29
United States
Date Value Consensus Forecast Previous
8:30 AM Chicago Fed National Activity Index March n/a n/a -0.64
8:30 AM Jobless Claims 4/24/2010 n/a n/a 460,000
11:00 AM Kansas City Fed Manufacturing Survey April n/a n/a 18

Friday, April 30
United States
Date Value Consensus Forecast Previous
8:30 AM Employment Cost Index 2010Q1 n/a n/a 0.5%
8:30 AM GDP 2010Q1 n/a n/a 5.6%
8:30 AM ISM – NY Report April n/a n/a 423.2 index
9:45 AM ISM-Chicago April n/a n/a 58.8
10:00 AM University of Michigan Consumer Sentiment Survey April 84.0 76.0 73.6
10:30 AM ECRI Weekly Leading Index 4/23/2010 n/a n/a 131.9
3:00 PM Agricultural Prices April n/a n/a 4.4%

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Existing Home Sales Rose 6.8% in March to an annualized pace of 5.35 million homes, the fastest since December. Total housing inventory at the end of March rose 1.5 percent to 3.58 million existing homes available for sale, which represents an 8.0-month supply. The median price was $170,700 in March, up 0.4% from March 2009. Distressed homes, typically sold at a 15 percent discount, accounted for 35% of sales last month – unchanged from February. Lawrence Yun, NAR chief economist, noted two important trends. “Sales have been above year-ago levels for nine straight months, and inventory has trended down from year-ago levels for 20 months running,” he said. “The home buyer tax credit has been a resounding success as these underlying trends point to a broad stabilization in home prices. This is preserving perhaps $1 trillion in largely middle class housing wealth that may have been wiped out without the housing stimulus measure.”
Producer Prices Rose 0.7% in March, Core Rate +0.1%. Energy costs increased 0.7%, Gasoline prices rose 2.1%, and Food jumped 2.4% in March, the most since January 1984. Inflation has been slowing recently, particularly the price readings that strip out volatile food and energy items that are closely watched by the Fed. In March, core consumer prices moderated to an annual 1.1%, the lowest level since 1966. For the 12 months ended March 2010, the unadjusted producer price index rose by 6.0%, the largest increase since September 2008. However, the core producer price index rose just 0.9% over the past year. Fed officials have begun to debate how and when to signal to markets that interest rate increases could be coming as the economy continues to grow. But with core inflation slowing and the unemployment rate at 9.7%, nearly all Fed officials were in favor of maintaining that pledge last month.
Initial Jobless Claims Fell by 24,000 to 456,000, but the levels remain elevated. Jobless claims continue to remain stubbornly high even though the U.S. economy is growing and the Labor Department’s March report showed jobs were being created. Economists have generally agreed that it will still take time to see an improved labor market. That view was reiterated again on Monday by Federal Reserve Governor Elizabeth Duke, who said it will take “sustained, robust job growth for some time” to help repair the damage from the 8 million jobs that were lost in the past three years.
FHFA Purchase-Only House Price Index fell 0.2% in February and is down by 3.4% from its level in February 2009. The regional indices came in mixed, with declines in the South Atlantic, New England, and West North Central divisions offsetting moderate increases in the Middle Atlantic, Pacific, and West South Central regions. Although the rate of decline the FHFA purchase-only index has been more moderate in 2009 and the early part of this year compared to 2008, it is still declining, in contrast with the U.S. Case-Shiller index and the NAR median home price, which have increased slowly since early last year. The discrepancy indicates that the conforming mortgage section of the housing market which the FHFA index covers is still weak and is still weighed down by a substantial amount of inventory, much of it in foreclosed homes.
Treasury Yield Near Lowest Level in 4 Weeks as Greek Concern Spurs Demand The Treasury 10-year yield fell to the lowest level in four weeks as concern Greece will need to tap emergency loans to avoid default pushed down stocks and boosted demand for the relative safety of U.S. government debt. The 10-year Treasury note yielded 3.74 percent at 8:51 a.m. in New York, compared with 3.73 percent yesterday. It dropped earlier to 3.72 percent, the lowest since March 24.

Economic Indicator News Release Calendar for the weeks ahead

Monday, April 19
United States
Date Value Consensus Forecast Previous
10:00 AM The Conference Board Leading Indicators March 0.6% n/a 0.1%
10:00 AM Risk of Recession March n/a n/a 32%

Tuesday, April 20
United States
Date Value Consensus Forecast Previous
7:45 AM Chain Store Sales Snapshot 4/17/2010 n/a n/a 2.1%
5:00 PM ABC News/Washington Post Consumer Comfort Index 4/18/2010 n/a n/a -43

Wednesday, April 21
United States
Date Value Consensus Forecast Previous
7:00 AM MBA Mortgage Applications Survey
4/16/2010 n/a n/a 536.3

Thursday, April 22
United States
Date Value Consensus Forecast Previous
8:30 AM Jobless Claims 4/17/2010 n/a n/a 460,000
8:30 AM Producer Price Index March 0.3% n/a -0.6%
10:00 AM Existing-Home Sales March 5.24 mil n/a 5.02 mil
10:00 AM FHFA Purchase-Only House Price Index February n/a -2.3% -3.3%

Friday, April 23
United States
Date Value Consensus Forecast Previous
8:30 AM Durable Goods (Advance) March 0.3% n/a 0.5%
10:00 AM New-Home Sales (C25) March 320,000 n/a 308,000
10:00 AM Mass Layoffs March n/a n/a 1,570
10:30 AM ECRI Weekly Leading Index 4/16/2010 n/a n/a 131.9

Monday, April 26
United States
Date Value Consensus Forecast Previous
10:30 AM Texas Manufacturing Outlook Survey April n/a n/a 7.2

Tuesday, April 27
United States
Date Value Consensus Forecast Previous
7:45 AM Chain Store Sales Snapshot 4/24/2010 n/a n/a 2.1%
9:00 AM S&P/Case-Shiller® Home Price Indexes February n/a n/a -0.7
10:00 AM The Conference Board Consumer Confidence April n/a n/a 52.5
10:00 AM Richmond Fed Manufacturing Survey April n/a n/a 6
5:00 PM ABC News/Washington Post Consumer Comfort Index 4/25/2010 n/a n/a -43

Wednesday, April 28
United States
Date Value Consensus Forecast Previous
7:00 AM MBA Mortgage Applications Survey 4/23/2010 n/a n/a 536.3
10:30 AM Oil and Gas Inventories 4/23/2010 n/a n/a 356.2 mil barrels
2:15 PM FOMC Monetary Policy April n/a n/a 0.0-0.25%

Thursday, April 29
United States
Date Value Consensus Forecast Previous
8:30 AM Chicago Fed National Activity Index March n/a n/a -0.64
8:30 AM Jobless Claims 4/24/2010 n/a n/a 460,000
11:00 AM Kansas City Fed Manufacturing Survey April n/a n/a 18

Friday, April 30
United States
Date Value Consensus Forecast Previous
8:30 AM Employment Cost Index 2010Q1 n/a n/a 0.5%
8:30 AM GDP 2010Q1 n/a n/a 5.6%
8:30 AM ISM – NY Report April n/a n/a 423.2 index
9:45 AM ISM-Chicago April n/a n/a 58.8
10:00 AM University of Michigan Consumer Sentiment Survey April 84.0 76.0 73.6
10:30 AM ECRI Weekly Leading Index 4/23/2010 n/a n/a 131.9
3:00 PM Agricultural Prices April n/a n/a 4.4%
Consensus Estimate Source: Thomson Reuters

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