<span style="font-size: 12px;">Mortgage backed securities (MBS) lost -122 basis points from last Friday's close which caused 30 year fixed rates to move higher for the second straight week and moved rates to their highest levels since October 14th. We saw our best rates on Monday and our worst rates on Friday.</span>

The much anticipated October Non-Farm Payroll (NFP) hit and it hit big, trumping just about every forecast. NFP came in at 204K and the market was expecting 125K (and even lower). The lower expectations were mostly due to speculation about the negative impact the government shutdown and corresponding decrease in consumer sentiment would have on the economy. But last week's 3rd QTR GDP reading of 2.8% and the prior week's very strong ISM manufacturing data pointed to economic growth which usually leads to more jobs. In fact, the Private Sector added 212K jobs in October while the Government Sector lost jobs.

Plus, the prior period (September) was revised upward from a low reading of 148K to a fairly respectable reading of 163K.

These numbers are subject to revision and often see major revisions. But even if October's reading of 204K was revised downward to 180K (which would be a huge revision downward), it would still be a big-time beat of the consensus estimates of 125K. And this has caused traders to rethink their projections on the timing of the eventual Fed taper of Treasury and MBS purchases which of course provides upward pressure on mortgage rates.

Mortgage RatesAnthony HoodEquity Investment CapitalOffice: 949-891-0067Email: tony@equityinvestmentcapital.comwebsite: www.equityinvestmentcapital.com