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Mike Sanley

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On Investors: Still a Roller Coaster

Posted by Mike Sanley on Sep 25, 2015 12:14:00 PM

The ups and downs of the markets continue.

 

There’s been a little more down than up this week so far, with the DOW closing Thursday down a little more than 200 points for the week. While the decision to leave interest rates untouched has been favorable to MBS prices, the stock market pull back was accelerated as the lack of confidence in the Fed statements caused concern of the overall health of the economy both at home and abroad. We have not seen a “correction” in the markets as some predicted but the roller coaster ride has continued. The next couple of weeks will help shape the direction markets will take.

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On Investors: Fed Keeps Rates At Record Lows

Posted by Mike Sanley on Sep 17, 2015 3:44:00 PM

Oh no, we won’t go…higher.

 

The Federal Reserve voted today 9-1 to keep interest rates at record lows and delay any increase until what may be 2016. This was the single biggest threat in years to what has been a record low interest rate environment. Stocks have reacted like one of those new, death-defying roller coasters with violent up and down swings after being steady most of the session before the announcement. Investors are repricing as fast as their fingers allow them with improved pricing, so for those of you that have been keeping your fingers crossed with some floats probably came through with a smile and some extra funds.

 

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On Investors: Wild Market Swings Continue

Posted by Mike Sanley on Sep 2, 2015 3:11:02 PM

The slowdown in China has reverberated throughout financial markets across the globe, and they are reacting as if they don’t know how to react. Down 550 points one day to follow the next with a 400-point upswing. It is starting to feel like this is going to take some time to iron out and let the market decide which way it wants to go.

 

At home we also continue the mixed bag of economic news. The revisions to U.S. Gross Domestic Product, which is the broadest measure of economic activity, showed an increase in growth during the second quarter to 3.7% from an original estimate of 2.3%. Wednesday ADP estimates for August private sector job gains showed a gain of 190k vs the consensus of 200k. This was only a small miss, and so far stocks have reacted favorably to the mixed bag of data. Friday we will get the Employment report which will be followed by a light week of reporting during the Labor Day shortened week.

 

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On Investors: All Eyes On China

Posted by Mike Sanley on Aug 14, 2015 10:49:52 AM

As the market sits today, we have stayed true to performance predictions since Dennis Lockhart gave investors the impression that the first federal funds rate hike is likely to take place soon. Lockhart believes that a rate hike will be appropriate in September unless the economy significantly underperforms expectations. But then came China again, and with an unexpected decrease in the valuation of its currency, it has sent shock waves through the world economies. This was an unexpected red flag, (no pun intended) as this may indicate China is more worried about the pace of their economy than first thought. The idea is that devaluing their currency makes their products less expensive on the global markets while making imports more expensive.

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On Investors: The Fed in the Driver's Seat

Posted by Mike Sanley on Aug 7, 2015 10:43:09 AM

No huge surprises last week from the Fed until early this week, when the Fed's Lockhart said that the economy is "close" to being ready for a rate hike, and turned MBS lower. Lockhart said that he feels that the economy would have to perform significantly worse than expected to prevent the Fed from raising the federal funds rate in September. Investors moved up their expectations for a September rate hike after the comments. Last week the only real reaction was to the Employment Cost Index, which was the lowest ever recorded since it was started in 1982.

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On Investors: Keep Bailing

Posted by Mike Sanley on Jul 17, 2015 11:23:00 AM

Keep bailing! Like a ship with a hole in it, they are stuffing the hull with Euros until they can find a way to patch the leaks. Another Band-Aid of $96 billion from the European Union will keep the ship floating for a little longer but just adds another layer of debt they can’t afford. We will see how long they keep stuffing money in the drain. At this time, Greece defaulting and leaving the Euro is almost inevitable, and has been factored into most markets during the crisis.

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On Investors: Fallout and Impact

Posted by Mike Sanley on Jul 9, 2015 11:57:00 AM

As Greece gets its can kicked down the road, investors are left wondering what road to even take. The daily back and forth in negotiations either breaking down or starting back up with creditors is making the markets spin. Just to throw gas on the fire, China and its impending slide seem to be gaining momentum even with the government trying several measures to artificially prop up stock values, to no avail as of yet. To be put into perspective ,the Shanghai composite is still 70% above where it was this time last year. The questions will be how far of a drop we will see and how far reaching its impact will be.

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On Investors: The Waiting Game Continues

Posted by Mike Sanley on Jun 25, 2015 2:43:00 PM

Greece may need some grease to loosen up the negotiating table.

 

As talks with creditors and the IMF continue to break down with members leaving discussions at a stale mate the market is not sure where to go. We all know the EU may end up on the rocks if Greece is allowed to default on their obligations, and world markets will likely follow. But hey that’s good for mortgage rates, right?

 

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On Investors: On The MBS Threshold

Posted by Mike Sanley on Jun 11, 2015 1:59:00 PM

The rollercoaster ride of MBS continues with wild swings in every direction.

 

As last week ended with MBS down about 1 and 18/32 the panic started to set in followed by some recovery this week. It’s hard to deny that the time has come, albeit a lot later than most of us thought. The tick upward in rates has started and not many factors will slow it down. The future of Greece, a slowdown in China and the employment data in the US will be the main focus going down the road. A range of reports in the U.S. and Europe over the last week showed improving economic conditions. Unfortunately, good news for the economy is typically not good for mortgage rates, which moved higher.

 

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On Investors: Getting Down To It

Posted by Mike Sanley on May 28, 2015 12:18:00 PM

As the wave of investors continues to move toward getting as granular as they possibly can with pricing, are they limiting the lenders overall options? As we see the new wave of investors going to customer specific pricing or the push to see who can have 100 rate sheet versions and regions, are we getting to where you send 90% of your volume to one investor to get the better incentive pricing? Granted there are a lot of other factors involved other than how much volume you send their way such as service, relationship, pass-through, etc.

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