Friday 11/7 … Jobs Reports are In

Today, the labor department released the jobs and unemployment numbers and they were disappointing. Economist's where expecting a loss of 200,000 jobs, but the numbers came in at a loss of 250,000 jobs. To make matters even worse, the prior 2 months numbers were revised lower by another 270,000 jobs. The unemployment rate was expected to come in at 6.3% after last months 6.1% reading, but this also came in worse at 6.5% rate of unemployment.

Typically, these numbers would be very friendly for mortgage backed securities and lower mortgage rates. We have seen a great deal of volatility so far this morning and our hope is these numbers aren't so bad that it drives investors to sell everything including mbs. Typically, when we receive bad economic news you will see a flight to safety meaning investors sell stocks and park their money into fixed income investments such as treasury notes and mortgage backed securities. As we have stated before though, we are not in typical times.

The market is starting to settle down some and mortgage backed securities are basically at unchanged levels from yesterday. I feel as the day moves along, we will probably see some money flowing into mbs moving rates lower. It is very surprising though to see the Dow futures still in positive terrority but that could be a result of the huge sell off in the markets post Obama election.

If you have not already locked in your interest rate, by default you are floating today. We should see similar rates and pricing today that we saw late yesterday. We will keep you posted as the market moves when appropriate. We are getting one more report today on Pending Home Sales which economists are expecting a drop of 3.4% after last months 7.4% increase, but this report will more then likely have no effect on mbs due to the jobs numbers today. A better then expected reading would be nice to see and would also provide some evidence that the housing market is beginning to find a bottom.