Where is market headed today? Mortgage rates for Thursday 1/15/09

Yesterday's news was pretty dire and today's probably won't be any better. There are lots of reports due out today. The Labor Department is expected to report that after 2 weeks of declines, unemployment claims will once again jump and their report on Producer Prices should show a huge drop of nearly 2% indicating that consumer demand dropped sharply. Two regional Fed's are reporting manufacturing activity which is expected to reveal further drops and three Fed Res. guru's are going to talk today about their economic outlooks.

Now for some better news. JP Morgan actually posted a small 4th quarter profit. But, it also placed over 4 billion aside for further credit writedowns.So, while it appears to have weathered the 2008 crisis a bit better than it's peers, there is still uncertainty over when it will be out of the woods. Conversely, B of A has asked for additional BAILOUT BUCKS so it can finalize it's acquisition of Merrill Lynch. They report earnings next Tuesday, so expect some pretty ugly numbers.

Mortgage application volume was up big last week-over 16% with refinances leading the way. Consumers looking for better rates and terms accounted for a 25% increase from the prior week. This is a result of the National average for 30 year fixed rate mortgages dipping below 5%. Yesterday's 10 year TNOTE yield closed at 2.21%, down from the open of 2.27%. Today's TNOTE direction will be largely affected by how JP Morgan's news is received by investors as it is the first of the big banks to report and will set the tone for the financial markets. The B of A news will also play a big factor. Yesterday's mortgage rates did indeed follow the 10 year bond as I saw rate sheets with pricing approaching 4.625%, down slightly from the prior day. I anticipate that they will hold at this level today.

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR OWN TRANSACTION