Mortgage Pros, Inc.

Retail Sales Unexpectedly Fell 0.3%in December after an upwardly revised 1.8% jump in November revised from +1.3%. The unexpected decline signals and uneven consumer recovery and spending restraint by consumers during the holidays as the economy wrestles with high unemployment.
Jobless Claims in U.S. Increased 11,000 Last Week, and have fallen 34% since reaching a 26-year high of 674,000 in the week ended March 28. Continuing claims dropped by 211,000 to 4.6 million in the week ended Jan. 2.
Import Prices were unchanged in December as fuel prices dropped, suggesting the global economy’s recovery and a weaker U.S. dollar don’t pose an immediate inflation threat to the economy. Prices of goods imported into the United States were flat in December compared to November, following a downwardly revised 1.6% increase the previous month,
Business Inventories rose by 0.4 percent in November, double the 0.2 percent rise that economists had expected. It was the second consecutive rise in inventories after 13 months of declines. The hope is that businesses will begin restocking their depleted shelves, helping to support the economic recovery.
Beige Book: Ten of the twelve Federal Reserve Districts reported “some increased economic activity or improvement in conditions”, while the remaining two Districts said conditions were mixed. As usual, the main message from the Beige Book is one that has already become largely apparent from other data. Incoming data has suggested that the economy was continuing to expand in late 2009 and that growth was likely better in 4Q than in 3Q.
Treasuries Rise as Sales at U.S. Retailers Unexpectedly Fall in December Treasuries prices rose, recovering from the selling Wednesday as retail sales unexpectedly dropped and weekly jobless claims rose, driving speculation the Federal Reserve’s keeping interest rates near zero will spur demand at today’s $13 billion 30-year bond auction. Bond prices had already started to recover following comments from New York Federal Reserve Bank President William Dudley, who said overnight that the central bank could keep the main policy rate at an ultra-low level near zero for “at least six months” and “could be a year from now, two years from now” depending on the economic outlook. Interest rate futures traders cut bets significantly on rate increases from the Fed as early as mid-2010 following last week’s poor nonfarm payroll data, pushing the two-year note’s yield, among the most sensitive to changes in official rate outlook, to dip back below 1%.
MBA Reduces 2010 Origination Outlook Again to $1.3 Trillion, Down 40% from 2009 and the lowest level in a Decade; Home Prices to Stabilize in Spring. Just last month, the Mortgage Bankers Association (MBA) projected that the industry would complete about $1.5 trillion in mortgage originations in 2010 compared to $2.0 in new mortgages in 2009. This 25 percent decline was bad news at the time, but the MBA’s Mortgage Finance Commentary reflects an even grimmer outlook. The new figures call for a decline in mortgage originations to their lowest level in a decade, a drop of 40 percent over the 2009 figure.. The forecast projected declines in home prices through the winter but showing some signs of stabilization in the spring. Still, a return to more typical rates of appreciation should not be expected until 2012. The report projects that rates will increase by about a percentage point over the year, ending at just 6.1 percent as a result of widening mortgage spreads and an increase in treasury rates driven by federal budget deficits. Once the Fed stops buying MBS, yields will have to increase before private investors come back into the market. MBA’s efforts in 2010 will be centered around (but not limited to) four main goals: Restore confidence in and ensure the future strength of the mortgage market; Reform the financial regulatory system; Continue to assist borrowers; and Promote liquidity during the disruption of the commercial real estate market.
Length of Fed’s Mortgage-Purchase Program Vital to Recovery. Just how long the Federal Reserve Bank continues to prop up the housing market will play a vital role in the economic recovery, according to Robert Rasche, executive vice president and senior policy adviser at the Federal Reserve Bank of St. Louis.
Recession deflected, Beware of the Double Dip and Bond Bubble. In The US, the UK and eurozone the question is: what exit strategies might work after last year’s artificial fiscal and monetary stimuli were introduced to deflect the possibility of economic collapse?
Spending in U.S. to Increase More Than Forecast, Helping Sustain Recovery Americans will spend more in 2010 than previously anticipated, marking a consumer recovery that will be constrained by unemployment, according to economists surveyed.

Economic Indicator News Release Calendar
This Week’s Calendar
Date ET Release For Actual Consensus Prior Revised From
Jan 12 08:30 Trade Balance Nov -$33.0B -$32.9B
Jan 13 14:00 Fed’s Beige Book
Jan 13 14:00 Treasury Budget Dec NA -$120.3B
Jan 14 08:30 Initial Claims 01/09 NA NA
Jan 14 08:30 Continuing Claims 1/2 NA NA
Jan 14 08:30 Retail Sales Dec 0.4% 1.3%
Jan 14 08:30 Retail Sales ex-auto Dec 0.4% 1.2%
Jan 14 08:30 Export Prices ex-ag. Dec NA 0.7%
Jan 14 08:30 Import Prices ex-oil Dec NA 0.4%
Jan 14 10:00 Business Inventories Nov 0.1% 0.2%
Jan 15 08:30 Core CPI Dec 0.1% 0.0%
Jan 15 08:30 CPI Dec 0.2% 0.4%
Jan 15 09:15 Capacity Utilization Dec 71.8% 71.3%
Jan 15 09:15 Industrial Production Dec 0.6% 0.8%
Jan 15 09:55 Mich Sentiment Jan NA 72.5

Week of January 18 – January 22
Date ET Release For Actual Consensus Prior Revised From
Jan 20 08:30 Building Permits Dec NA NA
Jan 20 08:30 Core PPI Dec NA NA
Jan 20 08:30 Housing Starts Dec NA NA
Jan 20 08:30 PPI Dec NA NA
Jan 21 08:30 Initial Claims 01/16 NA NA
Jan 21 10:00 Leading Indicators Dec NA NA
Jan 21 10:00 Philadelphia Fed Jan NA NA

Week of January 25 – January 29
Date ET Release For Actual Consensus Prior Revised From
Jan 25 10:00 Existing Home Sales Dec NA NA
Jan 26 10:00 Consumer Confidence Jan NA NA
Jan 27 08:30 Durable Orders Dec NA NA
Jan 27 10:00 New Home Sales Dec NA NA
Jan 28 08:30 Durable Orders Dec NA NA
Jan 28 08:30 Initial Claims 01/23 NA NA
Jan 29 08:30 Chain Deflator-Adv. Q4 NA NA
Jan 29 08:30 Employment Cost Index Q4 NA NA
Jan 29 08:30 GDP-Adv. Q4 NA NA
Jan 29 09:45 Chicago PMI Jan NA NA

This entry was posted on Friday, January 15th, 2010 at 8:47 am and is filed under HEADLINE NEWS, MORTGAGE NEWS, THE FED. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.