May 2013

Found 15 blog entries for May 2013.

Last week's rough ride for the bond market continues.  Since Friday we've seen a quarter percent increase in interest rates and the bellwether 10 year long bond hit its highest level since early 2012.  Mortgage rates have moved more than the 10 year which signals that all the positive economic news has convinced the entire international market that the Fed's buying of bonds is (has) coming to a quick end.  

So what has happened?  Since Friday, with Monday being a holiday, there have been very few economic reports.  One of the few of any consequence is yesterday's Consumer Confidence Report. The report showed April's numbers being revised upward slightly from 68.1 to 69.  The consensus for the May was an improvement on that to 71.2 with the high end of

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Rates Increase on Bernanke Testimony

Mortgage interest rates increased again this past week sparked by Congressional testimony from Fed Chairman Ben Bernanke before the Joint Economic Committee.  In his testimony, Bernanke said that the Fed may begin thinking about ending the current quantitative easing in the next three or four FOMC meetings.  The current quantitative easing includes $85 billion in monthly purchases of Treasuries and Mortgage Backed Securities.  The FOMC Minutes also revealed increased discussion within the Fed of reducing the current quantitative easing.  Economic data this past week was mostly stronger than expected.  Weekly jobless claims, April New Home Sales, and April Durable Goods Orders were stronger than expected.  New Home…
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Very rough first half of the week and today is topping them all.  Thursday of last week we saw some recovery in the bond market and rates. Friday the market deteriorated and the 10 year long bond closed at 1.95%.  Monday and early Tuesday we saw an upward drift with the long bond bumping against 1.97% before closing at 1.93%.  Today we saw improvement early and since 11:00 EST we've moved sharply up with the 10 year sitting (momentarily) at 2.03%.  For mortgage rates, we've had two re-pricings today, both for the worse and it doesn't appear it's over yet.

 So what's happening today? 

We've spoken for the past several weeks about the pessimistic feelings from the investors in the bond market.  In their opinion, the economy is improving and bonds are

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Rates Increase Despite Mostly Soft Economic Data
Mortgage interest rates increased slightly again this past week despite mostly weaker than expected economic data.  Weaker than expected Economic data included March Business Inventories, the May Empire State Manufacturing Index, April Industrial Production, April Capacity Utilization, the May Philadelphia Fed Business Index, weekly jobless claims, and April Housing Starts.  Stronger than expected Economic data included April Retail Sales, April Building Permits, the University of Michigan Consumer Sentiment Index, and April Leading Economic Indicators.  Also of note, inflation data continues to be tame.  The April Producer Price Index fell 0.7% and the April Consumer Price Index fell 0.4%, its largest

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One very bumpy ride so far this week.  Most the news is good for the economy and bad for rates. Even more important is the mindset of the investment market, they all seem to believe the very extended bond market rally is over and rates are headed up.  Feeding that belief is last Friday's interview with Bill Gross, fund manager for the country's largest bond fund.  His opinion is the rally is over and rates are on their way up.  The market is definitely listening.

So far this week, we've seen a number of major reports coupled with lots of minor reports.  In the more important category are:

Retail Sales which were expected to be down 0.3% but were actually up 0.1% despite a drop in gasoline prices.  Most all classifications of sales were up.  

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The University of Colorado-Boulder handed out nearly 6,100 degrees the weekend of May 11 including 4,687 bachelor’s degrees, 903 master’s degrees, 171 law degrees and 494 doctoral degrees.

And while many of those graduates are likely hoping to find full-time employment in the near future, a CU study shows that they may have a tough time doing so.

National policies – not necessarily hiring and financial obstacles – have created business uncertainty that has prolonged the sluggish recovery of U.S. jobs, according to the study.

Business owners and managers are not sure about the yet-to-be-realized costs of policies such as health care, tax reform, and environmental cap and trade as regulations take shape and are implemented, according to the study’s

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Rates Increase Slightly Despite Limited Economic

 Data Mortgage interest rates increased slightly again this past week despite limited economic data for markets to digest.  Economic data of note included weekly jobless claims which fell 4k on expectations that they would increase by 12k.  Weekly jobless claims are at their lowest level in five years.  The four week average of claims fell to 336,750, its lowest level since November of 2007.  Also of note, the Treasury auctioned $69 billion of 3 Year Notes, 10 Year Notes, and 30 Year Bonds which were met by markets with okay demand.  There is increasing talk that the Fed may curtail its current quantitative easing sooner than expected due to the recent positive employment numbers.  In Germany, factory

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Five Colorado metropolitan statistical areas made a showing on the 2012 Milken Institute Best-Performing Cities Index, which ranks metros by how well they are creating and sustaining jobs and economic growth.

All five of those Colorado metros appeared in the top 50 metros, with Fort Collins-Loveland ranking highest at No. 12, followed by Boulder at No. 15. While the Fort Collins-Loveland’s rank was a drop from third in 2011, Boulder’s was an improvement from 59th – the most improvement of any Colorado city.

The components by which metros are measured include job, wage and salary, and technology growth. In most years, these give a good indication of the underlying structural performance of regional economics, according to the Milken Institute.

The

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It’s never been more expensive to rent a home in Boulder or the Denver metro area, according to latest Denver Metro Apartment Vacancy and Rent Survey.

The county areas with the highest average rents in the first quarter of 2013 were Douglas County and the Boulder/Broomfield area, where the average rents were $1,186 and $1,150, respectively, according to the survey recently released by the Apartment Association of Metro Denver and the Colorado Division of Housing.

The average rent rose in all Denver-metro counties measured except Adams County, with the largest increases found the Boulder/Broomfield area and Douglas County, where the average rents grew year over year by 7.4 percent and 6.9 percent, respectively, according to a Colorado Division of

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All-in-all, a quiet start to the week. As we spoke about Friday, there are no reports of any consequence the first half of this week and the markets have just followed through on Friday's data.  On Friday we saw the 10 year treasury jump from 1.62% up to 1.74% by closing.  Since then we saw a slight climb up to 1.77% and then a retreat back to 1.75% today.  With no reports and no real economic news, the markets have stayed put.  

The one report of interest was the Consumer Credit report. It measures the amount of consumer credit outstanding and gives us an idea of future spending trends. February's numbers showed a very large jump at $18.6 billion and almost all was in installment credit (as opposed to credit cards) due to high car sales. March showed

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