According to Bloomberg, the Mortgage Bankers Association reported a record number of foreclosures for the fourth quarter. Loans in foreclosure rose to 4.58% of all mortgages, and the number of mortgages that were more than 90 days overdue rose to 5.09%.
Bonds were on a downward slide all day yesterday. Today mortgage bonds are slightly lower from yesterday’s close. This morning’s economic releases included the January CPI report which was expected to show an increase on a year over year basis, the January CPI was expected to edge higher to +2.8% year over year.
Construction on new housing posted better-than-expected results, for an increase of 2.8% in the month of January. This is the highest level of activity for housing starts in six months. This positive report is thought to have been influenced by the first-time home buyer tax credit and the low mortgage rates. It is also a sign that the housing market may be stabilizing, and recovering slowly but surely.
We have a lot of economic releases slated for today, beginning with January’s housing data, which came in higher than expected and is sending bond markets down even further.
This week will focus on the outcome of Monday’s European finance ministers meeting and whether there are any concrete details about how the EU plans to bail out Greece and key economic reports.
The market is closed today in observance of the President’s Day holiday. There are also no economic releases slated for today, but notable releases this week include tomorrow’s NAHB Housing data, Wednesday’s housing data and FOMC meeting notes, along with Friday’s inflation report (January’s consumer price index).
The retail sales report released by the Commerce Department today showed that sales have actually increased by 0.5% in January. While this release was initially scheduled for Thursday, a snowstorm delayed the report until today – Friday. This reportis an important indicator of consumer spending, which in turn influences the rate of economic recovery.
In economic news, today’s focus will be on the retail sales report which came in higher than expected, further signaling that the economic recovery is underway.
The weekly jobless claims data was released this morning, and initial claims came in relatively close to expectations. In chairman Bernanke’s testimony yesterday, the Fed Chairman stated that the Fed could soon possibly raise the discount rate, which is the rate that they charge commercial banks through their discount window.
Treasuries came under pressure yesterday following a disappointing 3-year auction and on speculation that the European Union will, in fact, step in to provide financial assistance to Greece.