Multiline Mortgage

Multiline Mortgage First Blog

Welcome to Multiline Mortgage's first blog. Please check come back to the blog each day to get the latest market news and updates.

Wednesday, 10/22/08 :

Stocks fell sharply yesterday on fears that earnings for last quarter will fall short of expectations. Treasuries benefited from the exodus from equities and gains were posted across the maturity spectrum.

In late trading, the 10-Year Treasury Note was up by 1-06/32, lowering its yield by 15 basis points to 3.59%; the Dow was down by 514.45 points to 8,519.21; and the Nasdaq was down by 80.93 points to 1,615.75.

A rise in the value of the dollar versus foreign currencies, rising inventories, and declining demand pushed oil futures lower on Wednesday. The price of a barrel of light, sweet crude oil for December delivery fell by $5.43 to settle at $66.75 on the New York Mercantile Exchange. This was the lowest close for a front-month contract since June of last year.

Though low energy prices often provide support for stocks, the falling demand for oil suggests a bleak economic outlook. The per-barrel front-month futures price has fallen by $78.54 or 54.06% since its record high of $145.29 posted on July 3.

By the end of stock trading, the Dow had lost 5.69%; the S&P 500, 6.09%; and the Nasdaq, 4.77%. The pessimistic economic outlook, disappointment with several key earnings reports in the last couple of days, and some lowered projections from other companies weighed the market. In the last two days, the Dow has fallen by a total of 746.22 points or 8.06%, the Nasdaq lost 8.72%, and the S&P 500 lost 8.99%.

On the 10th of the month, the Dow closed lower but yesterday's close was the second lowest since May of 2003. The S&P 500's close was the lowest since April of 2003 and the Nasdaq's close was the lowest since June of 2003.

The bond market has also been volatile this month. The yield of the benchmark 10-Year Note fell in the first four sessions of October by 37 basis points (yield moves inversely to price). It then rose by 62 basis points in the next five sessions. With the exception of a 1 basis point gain last Thursday, the yield has fallen over the last six sessions for a net decline of 48 basis points. Yesterday's closing yield was the lowest in the last ten sessions . . . .