THE BASIS POINT

WeeklyBasis 12/01/03: Rates Up on Strong Holiday Shopping

 

Rates/commentary for the week of December 1, 2003. Investors fled bonds and piled up on stocks to kick off this first trading week following Thanksgiving. Sinking bond prices pushed yields up, translating into a rate increase (since last week) of about 0.25%. Holiday shoppers didn’t disappoint over the weekend, and manufacturing data released this morning was better than expected. This strength in both business and consumer activity was the reason for the market movement today. Factory Orders and Worker Productivity figures come out Wednesday, with increases expected for both. If expectations are true, Factory Orders will hurt the bond market and rates, and Productivity may offset this (because high productivity helps the economy expand without inflation, meaning the Fed can hold rates low). Most bond market movement for the rest of the week will be based on stock performance. If stocks keep climbing, bonds will fall, driving rates higher.

Conforming ($50K – $322,700K) – NO POINTS
30 Year: 6.0% (6.14% APR)
15 Year: 5.375% (5.515% APR)
5/1 ARM: 4.875% (5.025% APR)

Jumbo ($322,701 – $650,000) – NO POINTS
30 Year: 6.25% (6.39% APR)
15 Year: 5.625% (5.765% APR)
5/1 ARM: 5.0% (5.15% APR)

 

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