Mortgage Market Update

MMG Update + By The Numbers - Monday, November 17, 2008 10:43am ET

Current Trend Direction: Sideways

Risks favor: Carefully Floating

Current Price of FNMA 6% Bond: $101.12, Unchanged

Bad news continues to infiltrate the markets today and Mortgage Bonds, currently near unchanged levels, are already far below where they were earlier. Stocks around the globe are lower fueled by worldwide recession fears. Japan became the latest economy to fall into a recession.

The New York Empire State Manufacturing Index came in near estimates at - 25.4, representing lowest reading since records began in 2001.

Banking giant Citigroup announced it will lay off 50,000 people on top of the 23,000 jobs they cut earlier this year. These heavy cuts would leave the second-largest US bank with about 300,000 jobs worldwide.

Our man on the Street, Joe Oakes, says that top executives at Goldman Sachs have decided to forgo their 2008 bonuses in the midst of one of the worst years on Wall Street in memory. Seven top executives have asked the compensation board committee to grant them no bonuses along with CEO Lloyd Blankfein. Blankfein's bonus in 2007 was $70 million...he'll have to struggle to make ends meet with that.

Industrial Production showed a 1.3% rise, higher than the -0.1% expected. September's -2.6% reading was revised lower to -3.7% making it the largest monthly drop in industrial production in over 60 years.

Mortgage Bonds continue to linger near the 200-day Moving Average for the 9th consecutive trading session. Bond prices attempted to rally earlier and moved up to touch exactly on the 200-day MA, but were turned lower as sell programs kicked in. For now we can float - but be ready to lock should pricing drift further to the downside and away from the 200-day MA.