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Daily Market Update 10/30/09

Mortgage rates dipped Friday following weaker than expected economic news. Consumer Spending fell in September for the first time in 5 months and Consumer Sentiment dropped below forecast. Personal Income was flat, as expected. The September Core PCE price index, the Fed’s preferred measure of inflation, rose 0.1% from August and increased at a tame 1.3% annual rate, providing further evidence that inflation is not a concern in the short term. Stocks moved lower. Next week is likely to remain volatile for mortgage-backed securities, with the release of key economic data Monday and Friday, and the Fed’s FOMC meeting Wednesday. The Institute for Supply Management Index, measuring manufacturing activity, will be announced Monday, and the Nonfarm Payrolls report, which includes the Unemployment Rate for October, will come out Friday.

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