Daily Mortgage Rate Lock Advisory

Rate Lock Advisory – Tuesday Oct. 28th

Rate Lock Advisory – Tuesday Oct. 28th

Tuesday’s bond market has opened well in negative territory despite a new record low reading on consumer confidence. The stock markets are showing sizable gains as investors speculate about another Fed rate cut tomorrow. The Dow is currently up 115 points while the Nasdaq has gained 9 points. The bond market is currently down 22/32, which with yesterday’s late weakness will push this morning’s mortgage rates higher by approximately .750 of a discount point.

The Conference Board reported late this morning that their Consumer Confidence Index (CCI) fell this month to its lowest reading ever. The reading of 38.0 was significantly lower than the 52.0 that was forecasted and indicates that consumers are too concerned about their own financial situations to make large purchases in the near future. This is actually favorable data for the bond market and mortgage rates, but traders are preparing for tomorrow’s FOMC meeting and reacting to this morning’s stock gain s. This has prevented bonds from moving higher as a result of this report.

The week’s FOMC meeting began today and will adjourn tomorrow afternoon. There is now a pretty large consensus that the Fed will lower key short-term interest rates at this meeting, but what is being debated is the size of the cut. Some analysts are calling for a .750 cut while the majority think a half-point reduction is coming. This makes the post meeting statement even more important than usual as traders will try to figure out if the Fed thinks this is the last cut or if they are prepared to make another in the future. The meeting will adjourn at 2:15 PM ET, so look for any reaction to come during afternoon trading.

Tomorrow also brings us the release of some important economic data. The Commerce Department will post Durable Goods Orders for September at 8:30 AM tomorrow. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factor ies for big-ticket items. Analysts are currently calling for a drop in new orders of approximately 1.0%. If we see a smaller than expected decline in orders, mortgage rates will probably rise as bond prices fall. A weaker than expected reading should be good news for the bond market and mortgage rates, but this data can be quite volatile from month to month and is difficult to forecast.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: bond, bond market, closing, consumer confidence index, consumer confidence index cci, durable goods orders, Fed, fed rate, financial situations, fomc meeting, lock, negative territory, ticke, tomorrow, U.S.

Rate Lock Advisory – Wednesday Oct. 8th

Rate Lock Advisory – Wednesday Oct. 8th

Wednesday’s bond market has opened in negative territory again, following the path of stocks and other markets despite the Fed rate cut news. The stock markets are showing another round of volatility this morning with the Dow down 60 points and the Nasdaq up 10 points but both well off earlier highs. The bond market is currently down 18/32, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point.

In a surprise move, the Fed announced an emergency rate cut of a half point to the benchmark Fed Funds rate. This was coordinated with several other international central banks in an effort to spur global economic activity. The markets initially took this as very good news, hence the strong opening in stocks. However, it was short-lived as skepticism about it being enough to fix the crisis rose. The bond market is suffering today, but as previously mentioned, I believe there is still more room for stocks to fall befo re bottoming out. This could mean bonds become the preferred investment and lead to lower mortgage rates in the immediate future.

Yesterday’s release of the FOMC minutes and words by Fed Chairman Bernanke actually helped fuel the theory that the Fed was getting ready to lower key rates again. But, not many people expected today’s move, particularly the involvement of other central banks. Still, it does signal that the Fed is in tune to the current crisis and ready to act at anytime to help slow or end the market meltdowns.

The only data scheduled for release tomorrow is weekly unemployment figures from the Labor Department. They are expected to show that 475,000 new claims were filed last week, down by 24,000 from the previous week. Unless they vary greatly from forecasts, I don’t think this data will affect mortgage rates much.

The only factual economic data of the week will be posted Friday morning. August’s Goods and Services Trade Balance will be released that day, but is not likely to cause much of a change in mortgage pricing. It will give us the size of the U.S. trade deficit, but usually does not lead to significant movement in bond prices or mortgage rates.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: bond, central banks, Chairman Bernanke, closing, Fed, fed chairman bernanke, fed funds rate, fomc minutes, global economic activity, lock, lower mortgage, preferred investment, rate, release tomorrow, surprise move, U.S., unemployment figures, week

Rate Lock Advisory – Tuesday Oct. 7th

Rate Lock Advisory – Tuesday Oct. 7th

Tuesday’s bond market has opened in negative territory as the volatility in the stock markets continue. After opening in positive territory, the Dow and Nasdaq have fallen into negative ground. The Dow is currently down 60 points while the Nasdaq has lost 20 points. The bond market is currently down 15/32, but I am not expecting to see much of a change in this morning’s mortgage rates.

If the major stock indexes continue to flip flop between positive and negative ground, we will likely see bonds and mortgage rates fluctuate also. Until the markets stabilize, it will be difficult to predict movement in mortgage pricing. However, I still believe that there is more room for stocks to fall, which would likely improve bonds and lower mortgage rates. In fact, I would not be surprised to see the 10,000 Dow benchmark be a ceiling for the immediate future. Accordingly, I am cautiously holding the float recommendations for the time being.

The first news of the week comes this afternoon when the Fed will release the minutes to the last FOMC meeting. These may be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed’s next move. If the Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates higher tomorrow afternoon. However, if they indicate that inflation is easing and that a rate increase is not likely in the coming months, we should see the bond market rise and mortgage rates drop during afternoon trading.

The only factual economic data of the week will be posted Friday morning. August’s Goods and Services Trade Balance will be released that day, but is not likely to cause much of a change in mortgage pricing. It will give us the size of the U.S. trade deficit, but usually does not lead to significant movement in bond prices or mortgage rates.

If I were consider ing financing/refinancing a home, I would…. Float if my closing was taking place within 7 days… Float if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: bond, bond market, bond prices, closing, Dow, Fed, Float, fomc meeting, inflationary pressures, lower mortgage, major stock indexes, market move, mortgage rates drop, negative territory, news of the week, rate, U.S.

Rate Lock Advisory – Sunday Oct. 5th

Rate Lock Advisory – Sunday Oct. 5th

This week brings us only one monthly economic report for the markets to digest and it is not considered to be of high importance. This means that the week will be left mostly up to the stock markets and other influences since there is a lack of factual data for bonds to trade on. In addition to the one report, we will also get the minutes from the last FOMC meeting that can also cause movement in rates if it reveals any surprises.

The first news of the week comes Tuesday afternoon when the Fed will release the minutes to the last FOMC meeting. These may be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed’s next move. If the Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates higher Tuesday afternoon. However, if they indicate that inflation is easing and that a rate increase is not likely in the coming months, we s hould see the bond market rise and mortgage rates drop during afternoon trading.

The only factual economic data of the week will be posted Friday morning. August’s Goods and Services Trade Balance will be released that day, but is not likely to cause much of a change in mortgage pricing. It will give us the size of the U.S. trade deficit, but usually does not lead to significant movement in bond prices or mortgage rates.

Also worth noting are two public speaking engagements by Fed Chairman Bernanke Monday and Tuesday. I don’t expect them to have much of an impact on the markets, but his words always have the potential to create a reaction in trading. He will be speaking at the annual meeting of the National Association for Business Economics, but I don’t see this to likely affect mortgage rates.

Overall, I suspect this is going to be fairly quiet week for the bond market and mortgage rates, especially compared to last week. For the most p art, I believe the week will be left to the stock markets and the Fed minutes. The most important day of the week is likely Tuesday with the Fed minutes, but any day of significant stock volatility may make that particular day the most eventful. The bond market will close early Friday in observance of Monday’s Columbus Day holiday, but it will also likely be a non-event to the markets.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: bond, bond prices, business economics, Chairman Bernanke, closing, factual data, Fed, fed chairman bernanke, fomc meeting, inflationary pressures, lock, market move, mortgage rates drop, news of the week, speaking engagements, Tuesday, U.S., week

Daily Rate Lock Recommendation – 08/22/2008 12:30:00 PM EST

Friday’s bond market has opened in negative territory following a strong open in stocks. The stock markets are posting sizable gains during morning trading with the Dow up 180 points and the Nasdaq up 22 points. The bond market is currently down 9/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.

There is no relevant data scheduled for release today, but Fed Chairman Bernanke did make a speech this morning at a conference in Wyoming. In it he implied that the problems in the credit markets may not be over and that they will continue to affect the economy. He added that the drop in oil prices was encouraging and should help ease inflation concerns.

Generally speaking, his words did not come as a surprise to many. They did however, help some to push back their estimated date of a Fed rate increase. Many had predicted the Fed would raise rates sometime this fall to help control inflationa ry pressures, but now feel that the increase may not come until the first half of next year. But, today’s negative open in bonds is more a result of the stock gains than his speech.

Next week has a fairly busy calendar with economic data scheduled for release each day. None of the reports are considered to be extremely important, but a couple of them are important enough to affect mortgage rates if their results differ from forecasts. The week starts off fairly light with July’s Existing Home Sales report late Monday morning. It is one of the least important reports of the week, but since it is the only one scheduled for that day we may see enough of a reaction in the markets to affect mortgage pricing if it varies greatly from forecasts.

It appears there are seven reports scheduled for release next week that are worth watching, in addition to the minutes from the last FOMC meeting. Look for more details on next week’s events in Sunday’s weekly p review.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Float if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: bond, Chairman Bernanke, closing, Fed, Float, Release, week, Wyoming

Daily Rate Lock Recommendation – 06/10/2008 11:00:00 AM EST

Tuesday’s bond market has opened in negative territory again as inflation concerns continue to hurt bonds and long-term securities that are sensitive to such issues. The stock markets are mixed with the Dow up 26 points and the Nasdaq down 12 points. The bond market is currently down 18/32, which will likely push this morning’s mortgage rates higher by approximately .375 – .500 of a discount point.

This morning’s only economic data isn’t the cause of today’s negative tone in bonds. April’s Goods and Services Trade Balance report gave us the U.S. trade deficit during that month. It showed a deficit of $60.9 billion that was higher than forecasts had called for. However, this data is not considered to be of high importance to the bond market and mortgage rates and therefore, has not influenced mortgage pricing this morning.

What caused this morning’s weakness was comments by Fed members, including Fed Chairman Bernanke that strongly hinted of a possible rate hike coming before another rate cut. The Fed is obviously concerned about inflation if they are talking rate increases, so mortgage related bonds are reacting negatively because they are extremely sensitive to inflation.

Later today, the Federal Reserve will release its Beige Book. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it shows slowing economic activity, the bond market may thrive and mortgage rates could drop shortly after the 2:00 PM ET release. If it reveals signs of inflation growing, we could see mortgage rates revise higher this afternoon.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Lock if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Tags: balance report, beige book, bond, bond market, Chairman Bernanke, closing, Fed, fed chairman bernanke, fomc meetings, inflation concerns, lock, mortgage rates, negative territory, negative tone, rate, refinancing a home, U.S.