Citi and B Of A both post huge losses-BUT, market will rebound today-Mortgage Rates for Friday 1/16/09

Citi and B Of A earnings(or should I say loss) reporting is now out and investors are ready to put this in perspective and also put it behind them and move forward. Citi is breaking up into two units-traditional banking and riskier asset holding-with the intent at some point in time to spin the latter off to other buyers. It has already sold it's investment arm off in order to regroup and raise capital. B Of A successfully negotiated with the current administration and received an additional 20 billion in TARP funds , now matching the 45 billion that Citi has received from the Treasury. This should allow them to get back into operating condition.

These moves will provide a basis for a Friday rally, but sentiment will likely be tempered by economic reports due out today. The Labor Department is releasing the Consumer Price Index results, expected to fall, reflecting the huge drop in gas prices. The other report also expected to show a large drop is Decembers Industrial production reading. Both of these are not expected to be any big surprise, but will show the continued weakness of the economy, not expected to revive any time soon.

So, once again, financials will set the tone today, and consequently treasuries should take a hit, raising TNOTE yield and possibly the 30 year mortgage pricing. There was a slight rate increase yesterday and I think it will continue today, but I also believe that rates will still remain sub 5%.

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