Markets enjoy strongest day of '12; mortgage applications rise
Posted June 6, 2012
As was somewhat expected, the markets took a deep breath after the dismal jobs report from last Friday. Corrections are normal when we experience a high level of volatility, and this week has been no exception.
The Dow enjoyed significant gains Wednesday, finishing up almost 300 points in what turned out to be the strongest trading day of 2012. The 10-year yield has moved up considerably since last Friday, finishing at a yield of 1.67 percent. That number is up from the low of 1.43 that we hit on Friday.
According to the Mortgage Bankers Association Mortgage Applications rose 1.8 percent for the week ending June 1. The rise was again driven by refinances, which now account for 78 percent of all mortgage activity. Purchases dropped again for the fourth week in a row, declining by just under 2 percent for the week.
The Fed’s Beige Book report, which is a measure of economic activity in the Fed’s twelve US districts, indicated Wednesday that economic growth was moderate across the country from early April through the end of May. Nothing earth-shattering out of that report, and the markets didn’t really react one way or the other on that data.
Jobless claims will be watched Thursday as well as testimony from the Fed chairman. He could give us some insight into the Fed’s perspective on QE3, as their next meeting is scheduled for June 19-20. Mortgage rates are still extremely strong.