Wall Street Greek: Pre-Market Business News: Mortgage Activity, International Trade, Treasury Budget

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Pre-Market Business News

Weekly Mortgage Applications

The Mortgage Bankers Association made its regular reporting of weekly mortgage activity in the pre-market today. Recent troubling and enthusing trends held true. First and foremost, 30-year fixed rate mortgage loans saw another jump in the average contracted interest rate, to 5.57%, from 5.25%. As a direct result of this, refinancing activity posted another drop, as the MBA's Refinance Index sank 11.8%, week-to-week. This weighed on the Market Composite Index, driving it down by 7.2% on a seasonally adjusted basis. Now the good news... Despite the rise in rates, the Purchase Index, which measures contracted loan initiation on property purchases, rose again. This week's increase measured 1.1% and continues a notable trend. When purchase activity rises in the face of a tough rate change, that's a darn good sign for housing. We will have more to say on this later.

International Trade

The International Trade Report reached the wire at 8:30 this morning. April's trade deficit expanded to $29.2 billion, from $28.5 billion in March (revised). Export activity contracted at a faster pace than imports, leading to the change in trade. The consensus had reportedly forecast a $28.5 billion figure, so this data is modestly disappointing. One might argue that the trade deficit had recently held true during economic expansion, and so the data may not be so disappointing.

The trade gap expanded in both petroleum and non-petrol goods. Briefly, we suspect global economic strife, especially in Europe, and the earlier efforts of the US toward recovery have led to an environment that feeds trade deficit expansion. As mentioned above, this should not change even as Europe eventually recovers, due to our consumption character.

Quarterly Services Survey

Look for the Quarterly Services Survey at 10 AM today. Today's report will cover the first quarter of 2009. In Q4 2008, the measured information and technology sector experienced quarter-over-quarter revenue decline of 1.2%, and year-to-year slippage of 1.5%. There is no forecast for this report.

Federal Reserve Speakers

Today at 10:00, Richmond Fed President Jeffrey Lacker addresses the North Carolina state Senate Appropriations Committee. At 12:15, Fed Governor Elizabeth Duke addresses the systemic importance of consumer protection at a Cleveland event.

EIA Petroleum Status

At 10:30, the EIA will make its regular reporting of changes in Petroleum and derivatives storage. Last week's data showed a crude oil storage increase of 2.9 million barrels.

Beige Book

The Fed releases its Beige Book of regional economic indicators at 2:00 PM today.

Treasury Budget

The federal government reports on the monthly change in its Treasury Budget at 2:00 PM. Bloomberg's consensus of economists forecasts an expansion of deficit of $180 billion. In April, a month where tax revenues regularly produce a surplus, a $20.9 billion deficit was reported. Historic government aid in dramatic times can bring such change.

Corporate News Drivers

Look for EPS news from Isle of Capri Casinos (Nasdaq: ISLE), Linktone (Nasdaq: LTON), Luby's (NYSE: LUB), Measurement Specialties (Nasdaq: MEAS), North American Energy Partners (NYSE: NOA), Optical Cable (Nasdaq: OCCF), PURE Bioscience (Nasdaq: PURE), Selectica (Nasdaq: SLTC), Spartech (NYSE: SEH) and Volt Information Sciences (NYSE: VOL).