Market Update 10/15/2009

CAN YOU SAY VOLITILE?!? MBS prices have been all over the board this morning, and are now down quite a bit (FNMA 4.50 -7/32) on some decent economic data. The stock market is also down (Dow -27.96, S&P -3.99) after a good run these past few days. Consumer Price data held no surprises as it came in essentially on target (CPI 0.2% vs. 0.2% est., Core CPI 0.2% vs. 0.1% est.). The Philly Fed print came in worse than expected (11.5 vs. 12.0 est.), while the NY Manufacturing Index came in far better than expected (34.57 vs. 17.25 est.). Initial Jobless Claims also came in better than expected (514k vs. 520 est.) dropping the 4-week average from 540.5k to 531.5k. It is unclear where the market will trend the rest of the day.

Tomorrow, Friday, 10/16 brings Industrial Production (est. 0.1%) and Consumer Sentiment (est. 73.5). Industrial Production will be watched for more signs of improvement in economic activity. A better than expected read here may put upward pressure on rates. An inline number or worse may keep rates in check. Again, Consumer Sentiment is not a true economic indicator, but it does shed light on the mentality of the American consumer. The American consumer will drive us out of this current funk we are in, so his/her feelings cannot be ignored. A better than expected number may put upward pressure on rates, as the markets will see this as a sign that spending may pick up. A worse than expected print may send rates lower, as consensus will figure that consumers will continue to hold tight on their wallets, stunting a would-be recovery.

Will Staney

Sr. Mortgage Banker

WJ Bradley Mortgage Capital

12444 Research Blvd. Ste. 103

Austin, TX 78759

(512) 377-1468 Office

(512) 644-1587 Cell

(866) 953-0155 Fax

www.wjbradley.com

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