“IF YOU CAN DODGE A WRENCH…YOU CAN DODGE A BALL.” (Rip Torn as “Patches O’Houlihan” in the 2004 hit movie “DODGEBALL”) But Traders couldn’t dodge the big Jobs Report coming out last Friday morning…and the numbers came in hard and fast, resulting in a narrow miss to the downside. Expectations were for 175,000 new job creations during the month of December, and the actual number came in at 157,000. Normally this worse than expected news would give Mortgage Bonds a small lift higher and help home loan rates improve…but previous month’s (November) Jobs number was revised higher…from 112,000 originally reported, up to 137,000. The net effect was that Bonds and home loan rates were largely unchanged on the day – and while there was some mid-week movement, home loan rates ended the week close to where they started.

The mid-week activity was mainly due to the release of the “minutes” from the last Fed meeting. May not sound like interesting reading, but remember that the minutes contain the open dialogue of the meeting, not the carefully crafted Greenspan statement released just after the meeting itself. Traders looked over the minutes and interpreted certain Fed members comments as signaling higher interest rate increases ahead, and are wary of more aggressive Federal Reserve action in 2005…and another rate hike on February 2nd is a lock.

YOU’RE STANDING IN THE CHECKOUT LINE…AND THE PERSON BEHIND YOU IS STANDING SO CLOSE YOU CAN HEAR THEM BREATHE. JUST ANOTHER RUDE INVASION OF YOUR PERSONAL SPACE? THERE COULD BE MUCH MORE AT RISK…DON’T MISS THIS WEEK’S MORTGAGE MARKET VIEW.

So what’s the game plan for this week? Probably not much volatility until the arrival of Thursday's Retail Sales report. Looking at it from a more technical angle, mortgage bonds may trade a bit lower early in the week and cause home loan rates to worsen slightly. Why? Take a look at the chart below. Each of the green and red “candles” represent one days trading…and it’s easy to see that lately, Bonds have been unable to convincingly move above several ceilings of technical resistance at the 25, 50, and 100-day Moving Averages.

When Bonds move higher, home loan rates move lower. So until Thursday’s Retail Sales Report – and absent any surprises – there won’t likely be enough economic news of the strength needed to propel Mortgage Bond prices higher above resistance and cause home loan rates to improve. This leaves a high probability of stable to slightly higher home loan rates early in the week.

BUYER BE-AWARE…

Ever been standing in line at the checkout…and the person in line just behind you seems to want to stand uncomfortably close? Be on guard…it could be much more than a rude invasion of your personal space.

Watch out carefully for people standing near you in the checkout line at retail stores, restaurants, grocery stores, who have a cell phone in hand. With the new camera cell phones, a scammer can easily take a picture of your credit card, giving them your name, credit card number, and expiration date – everything they need to start stealing from you immediately, as you innocently put your card back into your wallet, thinking all is well. CBS News recently reported that this type of identification theft is one of the fastest growing scams today…so watch your surroundings when checking out at the store.

If you are interested in more information about your credit and obtaining a copy of your report, just give me a call – I’m here to help!

The economic calendar expands this week with thirteen reports scheduled, mainly coming out on Thursday and Friday. The big mover this week will be Thursday’s Retail Sales Report, showing consumer spending habits. Also of interest will be Thursday’s Initial Jobless Claims number and Friday’s Producer Price Index (PPI).

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

For the week of January 10 – January 14