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Daily Market Update 9/19/13

Rates moved lower Thursday as mortgage-backed securities rallied following yesterday’s Fed announcement.  The Official Statement indicated the Fed would delay reducing the volume of monthly asset purchases, known as “quantitative easing” until it sees more evidence of economic growth, noting that the “tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market.”  Investors had expected the Fed to begin scaling back its monthly purchases of $85 billion in Treasuries and mortgage-backed securities by about $15 billion.  In today’s economic news, weekly Jobless Claims rose to 309,000, but for the second week in a row the figures were distorted by an upgrade to the computer systems in California and Nevada.  August Existing Home Sales increased unexpectedly to 5.48 million annual units, the highest level in over six years.  National Association of Realtors officials noted that August closings mostly represent contracts written in June and July, as mortgage rates began rising.  The Philly Fed Index, a survey of manufacturers in the mid-Atlantic region, jumped to 22.3, far exceeding expectations.  Leading Indicators rose by 0.7%, close to forecast.  No other key data will be released today.

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