Our country’s gross domestic product, grew 3.2% in the 4th quarter 2010, a touch below expectations of 3.6%. Consumer spending gave the number its biggest kick, up 3.0%. That component had the biggest gain in more than four years. The Employment Cost Index, another component of GDP, rose .4% which was the second smallest gain on record. Traders follow that number closely as it has a direct correlation to wage inflation. The University of Michigan Sentiment Survey was also released, dipping .3 to 74.2. The current conditions index did the trick, falling nearly 4 points as American’s question the need to purchase big ticket items. Market reaction to all of the above was not good for bonds or stocks in the early going. Since the open, bonds, notes, and mortgage backs have made a comeback with the 10 year note currently up 9/32’s (yield 3.35%) and mortgage backs unchanged (they were off 3 to 4/32’s in the early trade). Stocks are helping our cause, now off over 70 points on the big board
What does it all mean, 30 year fixed rate mortgages are still available below 5 percent, just barely.
