Daily Market Watch for Friday, March 12, 2010 (Courtesy of Larry Baer and Market Alert )
SHORT-TERM TREND (10 days or less). Tilted ever so slightly in favor of lower rates and higher investor prices.
LONG-TERM TREND (11 days or more) Tilted slightly in favor of lower rates and higher investor prices but fluttering very close to a trend transition price point.
 
15-Minute Daily Chart of the Fannie Mae 5.0% - 30 Year from mktalert.net
How The DJIA Can Affect Rates
Commentary: As you probably know by now – retail sales came in surprisingly strong in February, raising 0.3% in total and 0.8% excluding autos despite the inclement weather that battered much of the country last month. As usual the devil is in the detail, especially when cooler, calmer heads saw the major downward revisions that were made to the January figures – which originally indicated sales were up a robust 0.5% -- but audits of the data revealed overall sales were actually up a very modest 0.1%. Taken in a broader context these more experienced traders were quick to note that sales in February were below their February ’08 and ’07 levels. It remains abundantly apparent that as long as high unemployment continues to squeezed household incomes, spending will remain constrained – and that is a condition that tends to be supportive of steady mortgage interest rates.

Looking ahead to next week mortgage investors will nervously await Tuesday’s Federal Open Market Committee meeting. In the run-up to this event traders’ traditional handwringing and floor pacing will likely once again prove to be much ado about nothing. With a national jobless rate of 9.7% and inflation pressures not even a “blip” on policymakers’ radars it is almost a certainty that the Fed will leave their benchmark short-term interest rates unchanged. If this assessment proves accurate, the Fed’s monetary policy position will continue to be supportive of steady to perhaps fractionally lower mortgage interest rates.
 
Commentary and Chart Courtesy of Larry Baer and Market Alert