Phil Grossfield's Blog

A LITTLE EXTRA…

Jumbo Launch Tomorrow! Roller Coaster Ride Week

jumboJumbo Launch Tomorrow!   It was scheduled for launch today but management decided to rewrite the guidelines to include higher LTVs. How can I argue with that?  I NEED INPUT ON PRICING. If you can compare our price to other jumbo lenders I would appreciate it. Please email me if you are interested in helping me do a price comparison.

My Schedule:  Available all day….

My Market Watch:   Bonds Down Slightly – Fixed Pricing Better than Yesterday Morning & ARMs Unchanged.  The 30-year Fannie Mae bond is down -14bps on the day after initially being up. This week there is a lot going on…it’s a crap shoot on which way bond prices will go. There are multiple things happening that could dramatically affect bond prices. rollercoasterWe could be in for a monumental roller coaster ride….

Jobs Report Friday.  On Friday the Jobs Report is released and it is expected 177,000 new jobs will be reported. If the actual number comes in low, then rates/pricing would be expected to improve. Why? Because if less new jobs are reported than expected, then it suggests the economy is worse than thought. Therefore, traders would rather invest in bonds than stocks and when that happens rates/pricing improve. Conversely, if more new jobs are reported than expected, then rates/prices should get worse
…this is what I am expecting based on what I’m reading this morning.

QE Tapering. The results of the Jobs Report will no doubt affect a decision on QE Tapering. From what I gather, a strong economic report would work to justify tapering since it would be evidence the economy could handle the hit. However, if the Jobs Report comes out weak and in doing so indicates less than expected economic health, then we might see a reprieve from QE Tapering, or, at least a softer approach by the Fed. This would help rates/pricing or at a minimum not hurt us too bad. Since I believe the Jobs Report is expected to come in higher than expected, I expect QE Tapering language to be unkind and rates/pricing to worsen.  

Syria Air Strike. We should know today. I expect a decision to strike, and I expect this decision will result in a decline with the stock market and an improvement in the bond market. If I’m right, and please note some vehemently disagree with me, then an announcement confirming an air strike should result in improved rates/pricing. If I’m right about the Jobs Report and QE Tapering language, then an air strike on Syria might prove to balance the bond market out and take the sting out of a bond sell off and worsened pricing. You can read more about how I analyzed the pending Syria air strike here and again here.

My Disclaimer 

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