Daily Market Update 11/02/09

Mortgage rates were little changed Monday in spite of the release of stronger than expected economic data. The Institute for Supply Management manufacturing index rose to 55.7 last month from 52.6 in September. A reading above 50.0 indicates expansion. Pending Home Sales rose for the eighth straight month in October as buyers rushed to take advantage of the $8,000 first time homebuyer tax credit due to expire November 30. An extension of the credit by Congress appears likely, but has not yet been finalized. The Fed begins a two day FOMC meeting tomorrow, and while no rate change is expected, investors will be looking for clues as to when and how the Fed may begin unwinding the stimulus they’ve pumped into the economy. With unemployment at 9.8% and inflation under control in the near term, Fed officials may not be inclined to rush the process.

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