Daily Market Commentary for October 27, 2009

First Time Home Buyer Tax Credit

As the extension of the first time home buyer tax credit is up for debate in congress due to over $600 million in fraudulent claims, the IRS is also starting an investigation for over 100,000 additional cases that could also be fraudulent. (Read more at Millennium-Traders.Com) http://www.millennium-traders.com/news/marketcommentaryoctober2709.aspx

Economic data released today:

S&P/CS Home Price Indices Composite:
S&P Case-Shiller August 10-City Home Price Index fell 10.6% year over year; S&P Case-Shiller August 20-City Home Price Index fell11.3% year over year; S&P Case-Shiller August 10-City Home Price Index rose 1.3% month over month; S&P Case-Shiller August 20-City Home Price Index rose 1.2% month over month.

CB Consumer Confidence:
U.S. Conference Board October Consumer Confidence 47.7 versus September 53.4; U.S. Conference Board October Present Situation Index 20.7 versus September 23.0; U.S. Conference Board October Expectations Index 65.7 versus September 73.7.

Richmond Manufacturing Index:
Richmond Fed October Manufacturing Shipments Index 11 versus September 22; Richmond Fed October Manufacturing Index 7 versus September 14.

At the NYSE closing bell on the New York Stock Exchange, here is how the major world indices and major U.S. stock indices ended the trading session on the world markets as well as the emerging markets including the stock market closing bell price:
DOW (Dow Jones Industrial Average) gain 13.00 points, EOD 9,880.96
NYSE (New York Stock Exchange) shed 28.04, EOD 6,932.05
National Association of Securities Dealers Automated Quotations (NASDAQ) shed 11.09 points, EOD 2,130.76
S&P 500 (SPX) shed 2.63 points, EOD 1,064.32
BEL 20 (BEL20) shed 50.21 points, EOD 2,443.04
CAC 40 (CAC40) shed 0.5 points, EOD 3,743.95
FTSE100 (UKX100) gain 9.23 points, EOD 5,200.97
NIKKEI 225 (NIK/O) shed 150.16, EOD 10,212.46

New York Stock Exchange (NYSE) stock market indicators for the trading session today:
Advanced stock prices 1,081 declined stock prices 1,993, unchanged stock prices 96, stock prices hitting new highs 64 and stock prices hitting new lows 12. NYSE quotes for volatile stocks and market trends, as well as stock quotes, stock prices and stock symbols of Day Trading Stock Picks on the New York Stock Exchange stock market for Day Trading online and active Day Trading for those who are or would like to be Day Trading for a living: RPT shed 5.97, HOD 193.34, LOD 185.60, EOD 186.15; LTD shed 1.58, HOD 18.54, LOD 17.55, EOD 17.91; WMS shed 4.34, HOD 45.89, LOD 42.37, EOD 43.06; FAS shed 1.53, HOD 78.85, LOD 74.88, EOD 76.30; CME shed 4.51, HOD 322.89, LOD 315.42, EOD 316.50; CRI shed 6.78, HOD 28.23, LOD 19.17, EOD 21.66; BEN shed 4.02, HOD 114.83, LOD 105.43, EOD 109.00; OMI shed 7.22, HOD 43.00, LOD 38.78, EOD 39.93; CR gain 4.10, HOD 31.08, LOD 27.58, EOD 30.58; VFC shed 5.14, HOD 75.08, LOD 72.18, EOD 73.35.

National Association of Securities Dealers Automated Quotations (NASDAQ) stock market indicators for the trading session today:
Advanced stock prices 898, declined stock prices 1,832, unchanged stock prices 114, stock prices hitting new highs 39 and stock prices hitting new lows 37. NASDAQ quotes, volatile stocks and market trends, as well as stock quotes, stock prices and stock symbols of Day Trading Stock Picks on the NASDAQ stock market for Day Trading online and active Day Trading for those who are or would like to be Day Trading for a living: BIDU shed 49.31, HOD 388.20, LOD 353.03, EOD 383.66; ZRAN shed 1.27, HOD 9.26, LOD 8.50, EOD 8.90; AAPL shed 5.11, HOD 202.81, LOD 196.45, EOD 197.37; FSLR shed 4.65, HOD 156.00, LOD 148.45, EOD 150.22; SGMS shed 3.85, HOD 15.50, LOD 12.86, EOD 13.85; AMZN shed 2.57, HOD 124.26, LOD 119.42, EOD 122.07; DRWI gain 0.37, HOD 9.35, LOD 7.60, EOD 8.46; ITRI gain 1.86, HOD 61.38, LOD 58.81, EOD 59.65; WYNN shed 6.94, HOD 61.33, LOD 55.20, EOD 56.13; WINN shed 1.30, HOD 13.00, LOD 11.97, EOD 12.03; FELE shed 0.76, HOD 28.69, LOD 26.72, EOD 28.59; RCII shed 1.92, HOD 19.39, LOD 18.22, EOD 18.50.

Market trends on the American Stock Exchange (AMEX) and stock market indicators for the trading session today:
Advanced stock prices 200, declined stock prices 306, unchanged stock prices 55, stock prices hitting new highs 7 and stock prices hitting new lows 3.

Chicago Board of Trade Futures Market for the day, at time of this posting:
E-mini S&P 500 (ES) Dec 09: EOD 1060.75; Change -5.75
E-mini NASDAQ-100 (NQ) Dec 09: EOD 1,721.75; Change -26.25
E-mini DOW $5 (YM) Dec 09: EOD 9,835; Change -6
E-mini S&P MidCap 400 (MF) Dec 09: EOD 684.80; Change -9.70
Nikkei 225 (Yen) Dec 09: EOD 10,150; Change -95

World Currencies for the Forex Market, for Forex Trading by active Forex Traders, at time of this posting:
Euro 0.6760 U.S. Dollars 1.4792
Japanese Yen 91.8600 to U.S. Dollars 0.0109
British Pound 0.6109 to U.S. Dollars 1.6381
Canadian Dollar 1.0660 to U.S. Dollars 0.9381
Swiss Franc 1.0224 to U.S. Dollars 0.9781

COMMODITY MARKETS:
Energy Sector - Nymex:
Light Crude (December 09) gain $0.87, EOD $79.55 per barrel ($US per barrel)
Heating Oil (December 09) gain $0.02, EOD $2.08 a gallon ($US per gallon)
Natural Gas (December 09) gain $0.07, EOD $5.28 per million BTU ($US per mmbtu.)
Unleaded Gas (November 09) gain $0.04, EOD $2.07 a gallon ($US per gallon)  

Metals Markets - Comex:
Gold (December 09) shed $7.40, EOD $1,035.40 ($US per Troy ounce)
Silver (December 09) shed $0.56, EOD $16.54 ($US per Troy ounce)
Platinum (January 09) shed $26.80, EOD $1,319.00 ($US per Troy ounce)
Copper (December 09) shed $0.01, EOD $3.00 ($US per pound)

Livestock and Meat Markets - Chicago Mercantile Exchange (cents per lb.):
Lean Hogs (December 09) gain $1.98, EOD $55.43
Pork Bellies (February 10) gain $1.28, EOD $90.25
Live Cattle (December 09) shed $0.05, EOD $87.10
Feeder Cattle (November 09) gain $0.35, EOD $96.35

Other Commodities - Chicago Board of Trade (cents per bushel):
Corn (December 09) shed $7.25, EOD $370.75
Soybeans (November 09) shed $12.25, EOD $976.50

BOND MARKET:
2 year EOD 100 4/32, change 6/32, Yield 0.92, Yield change -0.10
5 year EOD 100, change 19/32, Yield 2.37, Yield change -0.12
10 year EOD 101 13/32, change 28/32, Yield 3.45, Yield change -0.10                      
30 year EOD 103 19/32, change 1 14/32, Yield 4.28, change -0.08

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 here's one thing no one can deny:

this tax credit has not helped unemployment rate one bit.

it is wrought with fraud -- heck, one family had a 4-y/o as the buyer of a house so as to claim the 8000 credit.

how ludicrous

As a volunteer at San Jose's Foreclosure Help Center, First -Time Homebuyers should take a long hard look at their current job situation, is it really stable and secure in this current economy? The tax credit may seem attractive for the moment, but what will happen if works hours are cut back and one is laid off?Prices might have come down and interest rates are low, but there are no guarantees. What's really upsetting is how last week I got a call from a Hispanic man needing help with a loan modification and he didn't know how to spell his name when I asked him. I don't know how he ever got approved for the loan and actually signed the closing loan papers!!!! The realtor, loan agent & notary had to have been in collusion on the transaction from the get go!!!!

My co-worker just bought a house using the first-time home buyer's tax credit. His closing is this week on a $72K, 1,800 sq ft home, so he'll receive a $7,200 credit for it that he used as the 10% down payment. He was already paying $550 a month for his apartment... and nobody was concerned about whether or not he could afford his own apartment if he lost his job.

Of course, the realtor and loan agent would not be concerned because they are on COMMISSION ONLY and they only get paid if the transaction closed!!! The mortgage company can only base it's decision on what current facts are, not what might happen in the future. In today's economic climate, the buyer must take ownership in his decision about his job stability if he buys a home instead of rent. Most people buy a home based on their emotions, not by thinking everything through and considering the pros and cons.  

In today's economic climate, a landlord needs to scrutinize his apartment renters carefully for their job stability if he wants to have his commercial mortgage paid.

 Oh, that's right. The commercial mortgage collapse hasn't fully happened yet, so of course you think renting an apartment is more financially stable right now than house ownership.

In my area, a few years ago, an entire trailer court (some 20 trailer families) was told that they had to move because their landlord wasn't paying the water/sewer bill, and they weren't allowed to live in an area where the water and sewer was shut off. And this was before the economic collapse happened. The tenants always paid their rent in full and on time, but the landlord was financially irresponsible.

Hmmph, they'd have been better off in their own house on their own property paying their own bills.

 It was grrrrrrreat news today to hear that the Credit is now being extended through the end of April 2009. House sales dropped last month , with the undercurrent expressing concern this program incentive would be dropped as scheduled the end of November. 

The problem with stating .. " they'd have been better off in their own house on their own property paying their own bills." is one of those generalities that have put us in the debacle. Just because the trailer park landlord was financially irresponsible doesnt mean any of those tenants are more worthy of falling into the same trap when they find that they have taken on more than they bargained for. Some people are irresponsible, some people are not. This isnt all about people losing jobs and not being able to pay. Regional banks are still letting folks live in houses where they havent paid on their mortgage in over a year. Cooking the books. If all these bad loans were accounted for, the true collapse would be exposed. Have mortgagees just pay interest and make the banks books look prettier. Oh.. I dont want to think about this right now.  Im just hoping my credit worthiness will hold true and perform when I go to buy one of those foreclosed condos in Florida; I see the light. 

Yes, you're right that there are greedy & irresponsible landlords as well. But my point is that during THESE uncertain economic times, one MUST do his own due diligence and weigh out ALL risk factors before making one's largest lifetime investment.  With a First-Time Homebuyer, he/she is mostly thinking of the dream of being a homeowner and how to make that dream home his/her own. I know because I was a Homeownership Counselor before being laid-off and everyone I met and talked to DID NOT understand the homebuying process, about loans and post home purchase responsibilities. Most everyone wanted to buy above what they  qualified for and had little or minimal down payment saved. I can imagine now how many are near or are in foreclosure because they were adamant about not missing the boat if they didn't buy at the time!!! 

 We are in agreement PP.