Clint Hammond

Mortgage bonds finished the day slightly ahead, 3bp of where we started. Headline PPI rose 1.2% in July, that was double the expected figure, and leaving the year over year headline PPI at a blistering 9.8% and the biggest year over year gain in 27 years, largerly due to ridiculously high oil prices in July. Typically a hot inflation number like this would pressure our mortgage bonds lower as we should know by now but with oil dropping over the past few weeks, Traders appear to think that next month's wholesale inflation reading will cool off a bit. Building permits fell just short of expectations, 937,000 actual compared to the expected 959,000. Housing starts edged over expected figures, 965,000 actual and 960,000 expected.

In other areas of interest, the US dollar lost some ground allowing commodity prices, including crude oil, to rebound. However, Dallas Fred Pres. Richard Fisher said he sees economic growth slowing to a snails pace over the coming year to eventually lessen inflationary pressures. So The housing figures helped pressure stocks lower pushing more money into bonds, Fishers comments, and higher oil prices, had the Dow finishing at 11,348 (down 130 points), the NASDAQ closing at 2,384 (down 32 points) and the broader S&P at 1,266 (down 11 pionts.) Stocks finishing in the red of course helped, although only slightly, our mortgage bonds close out up 3bp at $100.22. This is on the back of several days of gains and we're currently battling a very tough ceiling of resistance at the 50 day moving average.

All told, it's no time to hesitate. Get in the new home or take advantage of rates while they are here because what will happen tomorrow is anyones guess and the money stood to gain by waiting is far less than the money you could lose. Call anytime!