Tuesday, December 1, 2009

What Happened to November?

Better yet, what happened to October? The last 60 days have been a flash and have left the Efinity Report void of updates. Perhaps my New years resolution will include a more time spent on submitting these valuable nuggests. That said, thank you to many of you for the emails inquiring on the Efinity Report.

Release Date & Time
Economic Indicator
Consensus
Estimate
My Analysis

Mon. Nov. 30
Nothing of any significance.

Tues. Dec. 1, 10:00 a.m. ET
Nov. Institute of Supply Mgmt.
55.0 vs. last 55.7
Because auto manufacturing is contributing less to growth this measure of factory activity is expected to post a modest decline. Most mortgage investors will likely show little reaction to this data. This report to exert little, if any influence on the direction of the markets today. I would suggest to see how the Dubai World problem plays itself out. Given the lengthy and continued run up in fixed income pricing, it would not surprise me to see a fairly strong pull pack in late afternoon trading.

Wed. Dec. 2, 2:00 p.m. ET
Fed Beige Book released
This report, named for the color of its cover, is a compilation of economic reports from all 12 Federal Reserve districts. The brighter tones of recovery in most districts will likely be offset by still grim news in terms of employment. The chance any of the data in this report will surprise investors is small. Look for this data to be essentially “toothless” with respect to its impact on the trend trajectory of mortgage interest rates.

Thurs. Dec. 3, 8:30 a.m. ET
Revised Q3 Productivity & Unit Labor Costs
+8.6% vs. last +9.5%
-4.2% vs. last -5.2%
If the consensus estimate proves correct, this report may be a little unsettling for mortgage investors. A downward adjustment in productivity gains and an upward revision in labor cost is not typically the “stuff” that lower mortgage interest rates are made
of.

Thurs. Dec. 3, 8:30 a.m. ET
Initial jobless claims for the
week ended 11/28
Up 14,000
According to data provided by the Dismal Scientist initial jobless claims have shown a tendency to rise in the week including the Thanksgiving holiday in 7 of the past 10 years.
There is little reason to expect this phenomenon will not prevail once again this time around. Look for this data to draw little more than a passing glance from mortgage investors.

Thurs. Dec. 3, 10:00 a.m. ET
Nov. Institute of Supply Mgmt.
Service Sector Index
51.5 vs. last 50.6
The fractional improvement in the month-over-month value for this measure of activity in the largest segment of the economy is broadly anticipated. A reading that matches or lands close to the consensus estimate will likely result in little change to mortgage interest rates. Only in the most unlikely event that the ISM Service Sector Index falls below a reading of 50.0 would mortgage interest rates be expected to move noticeably lower as a direct result of this report.

Thurs. Dec. 3, 10:00 a.m. ET
Senate Banking Committee holds confirmation hearing on the nomination of Fed Chairman
Bernanke to a second term as chief of the U.S. central bank. Look for Committee members to attempt to lay complete blame for the swoon in the economy at the feet of Mr. Bernanke (a
hack job on a bureaucratic scapegoat is always a far better political option as opposed to accepting responsibility directly – especially with mid-term elections so close at hand). The exchanges here have the potential to be heated – but nothing in the way of market moving rhetoric is likely.

Fri. Dec. 4, 8:30 a.m. ET Nov.
Nonfarm payrolls
Jobless rate -130,000
10.2% vs. last 10.2%
Businesses accross most channels are still shedding workers. The headline nonfarm payroll number may have improved but the first-quarter average monthly loss still reflects loss of 691,000 jobs. It will likely take a headline job loss of 150,000 or more and/or a jobless rate of 10.3% or more to create enough stir in the markets and interest rates lower.