Welcome back from the Holiday. Stocks are experiencing a face-ripping rally this morning, while mortgage backed securities and Treasury Bonds are selling off. If this continues we will likely see mortgage rates increase today.
The reason for the stock rally? It certainly isn’t good news out of Europe. Overnight rumors of an IMF-sponsored bailout of Italy are now being denied. Warnings of an imminent break up of the Eurozone are becoming louder and more frequent. Fitch cut Portugal’s credit rating to “junk” on Friday, and S&P lowered Belgium’s rating a notch over the weekend. Even the yields on German bonds are rising, demonstrating that this debt crisis could even reach Europe’s strongest economy.
So why are we rallying? It seems that this is a favorable reaction to what is purportedly a strong start to the holiday shopping season (as Barry Ritholtz notes, this may not be true). It could also be that traders are looking for an excuse to drive a rally coming off of a horrendous two week span for equities. There are a lot of economic reports due out this week, and if they turn out to be stronger than anticipated, they could balance out negative news from Europe and push stocks and mortgage rates higher. Despite this possibility, I suspect that news out of Europe will get increasingly dire throughout the week and will ultimately drive stocks and mortgage rates lower.
Some of Our Rates and Products*:
| Mortgage Product | Mortgage Rates | APR |
|---|---|---|
| 30 Year Fixed Conventional Mortgage | 3.750% | 3.862% |
| 15 Year Fixed Conventional Mortgage | 3.250% | 3.448% |
| 30 Year Fixed FHA Mortgage | 3.750% | 5.092% |
| 30 Year Fixed Jumbo Mortgage | 4.500% | 4.600% |
| 5/1 Conforming ARM Mortgage | 2.750% | 2.711% |
| 5/1 Jumbo ARM Mortgage | 2.875% | 2.695% |
***Mortgage rates change frequently. The above rates were quoted at 1:01 P.M., on November 28, 2011. Call 877-868-2503 for more details.***
Today’s Links:
Felix Salmon: Chart of the day, Morgan Stanley bailout edition.
Ritholtz: No, Black Friday sales were not up 16% (not even 6%).
Bloomberg: Mounting Euro breakup risk seen by banks. They can’t be just realizing this now. That they are publicly acknowledging it seems ominous.
Bloomberg: Secret Fed loans gave banks undisclosed $13B. It took Bloomberg a couple of years and many FOIA requests to pry this information from the Fed.
Reuters: IMF denies in Italy aid talks. Stock futures were rallying last night on this news. I guess they are still rallying due to the Black Friday sales?
NY Times: Greeks balk at paying steep new property tax. Bad times in Greece.
Washington Post: Obama hosts European leaders as debt crisis escalates.
Moody’s via Los Angeles Times: Every European nation now at risk on debt.
* All rates shown are for 30 day rate locks. Longer locks are available. The APR for conventional loan amounts is calculated using a loan amount of $417,000, 1 point, a $495 application fee, $400 appraisal fee, $715 underwriting fee and a $16 flood certification fee. The APR for jumbo loan amounts is calculated using a loan amount of $500,000, two points, a $495 application fee, $400 appraisal fee, $715 underwriting fee and a $16 flood certification fee. The APR for FHA loan amounts is calculated using a loan amount of $295,000, two points, a $495 application fee, $450 appraisal fee, $715 underwriting fee and a $16 flood certification fee. Some rates and fees may vary by state. All interest rates listed are for qualified applicants with 720 or higher FICO and 80 LTV and are subject to mortgage approval with full documentation of income. All rates are subject to change without notice. All rates shown are for 30 day rate locks with 1 point unless otherwise noted.
Total Mortgage consistently offers some of the lowest current mortgage rates, jumbo mortgage rates, and fha mortgage rates in the country.
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