leading economic indicators
Daily Mortgage Rate Lock Advisory – Wednesday Nov. 19th
Rate Lock Advisory – Wednesday Nov. 19th
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Wednesday’s bond market has opened in positive territory following favorable results from today’s CPI release. The stock markets are showing another round of early losses with the Dow down 150 points and the Nasdaq down 40 points. The bond market is currently up 17/32, which will likely improve this morning’s mortgage rates by approximately .250 of a discount point.
The Labor Department gave us today’s big news with the release of October’s Consumer Price Index (CPI). They reported that the overall reading fell 1.0% last month while the core data fell 0.1%. Both of these readings were below forecasts, indicating that inflationary pressures at the consumer level of the economy were not as bad as many had thought. This is very good news for bonds and mortgage rates.
October’s Housing Starts was also posted this morning, showing a stronger level of new starts than what forecasts were calling for. That could be considered bad news for the bond ma rket and mortgage pricing, but this data is not considered to be of high importance to the markets therefore has had little impact on today’s pricing.
The minutes to the last FOMC meeting will be released at 2:00 PM ET. 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 a likelihood of another rate cut in the coming months, we should see the bond market rise and mortgage rates drop during afternoon trading.
Tomorrow brings us the release of weekly unemployment figures and October’s Leading Economic Indicators (LEI). The Labor Department will post weekly unemployment claims but unless it varies greatly from the 503,000 that is expected, I don’t believe this data will affect tomorrow’s mortgage pricing.
The LEI will be posted by the Conference Board at 10:00 AM ET and is expected to show a decline of 0.6%. This means that the report is predicting economic activity to slow relatively quickly in the next three to six months. That would be good news for bonds because a slowing or weakening economy generally speaking makes bonds more attractive to investors and usually leads to lower mortgage rates.
If I were considering 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.
Rate Lock Advisory – Monday Oct. 20th
Rate Lock Advisory – Monday Oct. 20th
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Monday’s bond market has opened up slightly despite early stock gains. The stock markets are mixed the Dow up 102 points and the Nasdaq down 3 points. The bond market is currently up 2/32, which will likely improve this morning’s mortgage rates by approximately .125 of a discount point.
Today’s only economic data was September’s Leading Economic Indicators (LEI). This index attempts to measure future economic activity, particularly during the next three to six months. It was expected to show a decline of 0.3% but revealed an increase of 0.3%. This means that the economy may strengthen during the next few months when it was expected to worsen. However, offsetting this news was a downward revision to August’s reading. What was previously announced as a 0.5% drop in August is now believed to be a 0.9% decline. That revision is helping to offset the surprise jump in this month’s reading.
The primary focus in this morning’s trading is Chairman Ber nanke’s testimony before the House Budget Committee. He updated the committee on the status of the economic recovery, which included a prediction that the economy would be weak for several quarters. He also encouraged another economic stimulus package that may benefit taxpayers. His words are being taken as favorable to bonds, so look for some improvement as the morning goes on.
There is no relevant economic data scheduled for tomorrow or Wednesday. This will likely keep bonds fairly calm unless the stock markets are volatile again. As long as the major stock indexes remain calm, I am expecting the bond market and mortgage rates to follow suit for the most part.
Overall, I am expecting to see a fairly quiet week for mortgage rates, assuming the stock markets are not wild again. The most important day will likely turn out to be today. However, just because it is a light week in terms of economic news, we should not let our guard down as the marke ts can implode or rally at anytime these days.
If I were considering 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.
Rate Lock Advisory – Sunday Oct. 19th
Rate Lock Advisory – Sunday Oct. 19th
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There are only two pieces of data scheduled for release this week that may affect mortgage rates along with testimony by Fed Chairman Bernanke. Neither of the reports are considered to be of high importance to the markets, so I am expecting the stock markets to again play a significant role in bonds swings and changes to mortgage rates.
The first report is will be posted late tomorrow morning when the Conference Board posts September’s Leading Economic Indicators (LEI). This index attempts to measure future economic activity, particularly during the next three to six months. Current forecasts are calling for a decline of 0.3% from August?s reading. This would indicate that economic activity is likely to slow moderately. That would be good news for the bond market and mortgage rates.
Chairman Bernanke will speak before the House Budget Committee late tomorrow morning regarding the status of the economic recovery plan. As usual, market participants will be watching his words carefully. We may see them cause fluctuations in the markets while he is speaking, however, I suspect he will not say anything drastically surprising to anyone.
The middle part of the week is very calm in terms of economic releases and related events. Accordingly, look for significant movement in the stock markets to lead to any sizable movements in bonds or mortgage pricing.
September’s Existing Home Sales that will be posted at 10:00 AM ET Friday. This report gives us an indication of housing sector strength and mortgage credit demand. I don’t see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts’ forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.
Overall, I am expecting to see a fairly quiet week for mortgage rates, assuming the stock markets are not wild agai n. The most important day will likely be tomorrow with the more important of the two releases scheduled and the testimony from Chairman Bernanke. However, just because it is a light week in terms of economic news, we should not let our guard down as the markets can implode or rally at anytime these days.
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.
Rate Lock Advisory – Friday Oct. 17th
Rate Lock Advisory – Friday Oct. 17th
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Friday’s bond market opened relatively flat compared to recent trading sessions despite favorable economic news. The stock markets are up slightly with the Dow up 11 points and the Nasdaq up 6 points. The bond market is currently up 4/32, which will likely keep this morning’s mortgage rates at yesterday’s levels.
There were two economic report posted this morning, with both of them giving us weaker than expected results. September’s Housing Starts came in at a 17-year low, further supporting the theory that the housing sector is far from a recovery. The 6.3% drop in new starts was a much larger decline than analysts had forecasted. This is good news for bonds, but since the data is not considered to be of high importance, it has had a minimal impact on mortgage rates.
The second report of the day and the last of the week was October’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment. It showed a reading of 57.5, which was well off from forecasts of a 65.0 reading. This means that consumers were much less optimistic about their own financial situations than many had thought. That is also good news for mortgage rates because waning confidence usually means consumers spend less, which in turn slows economic activity and eases inflation concerns.
Next week is very light in terms of economic releases scheduled to be posted. Monday does bring us one of the week’s few reports with the posting of September’s Leading Economic Indicators (LEI) that attempts to predict economic activity over the next three to six months. It is a moderately important report and may cause a slight change in mortgage rates.
Look for more details on next week’s events in Sunday’s weekly preview.
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.
Rate Lock Advisory – Thursday Sep. 18th
Rate Lock Advisory – Thursday Sep. 18th
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Thursday’s bond market has opened in negative territory as the markets go through another day of significant volatility. The stock markets are currently showing gains, but are well off earlier highs. The Dow is currently up 66 points but is down over 100 points from its earlier high. The Nasdaq is now up 7 points but has slipped nearly 40 points from its peak of the morning. The bond market is currently down 10/32, however, we will likely see little change in mortgage rates due to strength late in the day yesterday.
This morning’s economic news was actually favorable to bonds, but the seesaw activity in stocks and the fact that neither of today’s releases are considered to be very important has prevented bonds from reacting to the data in a positive way. The Labor Department said that 455,000 new claims for benefits were filed last week. This exceeded analysts’ forecasts but since the data tracks only a week’s worth of claims, its impact on bonds and mortgage rates usually is fairly minimal.
Also posted this morning was August’s Leading Economic Indicators (LEI) that showed a 0.5% drop. This index attempts to measure economic activity over the next three to six months, meaning economic activity is being predicted to slow fairly quickly during the near future. That is considered good news for bonds, especially since it was expected to fall only 0.2%. But again, stocks and financial sector news is taking the lead in bond trading.
There is no relevant data scheduled for release tomorrow. This leaves stocks to again heavily influence trading. Generally speaking, falling stock prices should push bonds higher and mortgage rates lower as investors shift funds for safety. But if stock prices rise, those same funds will likely be pulled from bonds to be put back into stocks, leading to upward revisions to 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… 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.
Rate Lock Advisory – Wednesday Sep. 17th
Rate Lock Advisory – Wednesday Sep. 17th
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Wednesday’s bond market has opened in positive territory following significant losses in the stock markets. The Dow is currently down 281 points while the Nasdaq has lost 70 points. The bond market is currently up 9/32, but we will still see an extremely large increase in mortgage rates compared to yesterday’s. Overall, this morning’s rates should be approximately one full discount point higher, or a quarter of a percent in rate.
This morning’s stock weakness is a result of more concerning news in the financial sector, particularly the need for the Fed to intervene in the AIG crisis and other related issues. The stock markets managed to rally late yesterday after the Fed meeting adjourned, leading to selling in bonds that affected this morning’s mortgage pricing. Despite today’s stock weakness, the bond market cannot overcome its concerns nor erase the losses from yesterday that are helping to drive mortgage rates higher this morning.
Today’s only relevant economic news was the release of August’s Housing Starts that showed new starts for homes fell to a 17 year low last month. This was a level that was much weaker than analysts had expected. However, because this data is not considered to be of high importance to the markets, its impact on this morning’s mortgage rates has been limited.
The Labor Department will give us weekly unemployment claims tomorrow morning. They are expected to show that 440,000 new claims for benefits were filed last week. This would be a slight decline from the previous week.
Late tomorrow morning, the Conference Board will release its Leading Economic Indicators (LEI). This index attempts to measure economic activity over the next three to six months. If it estimates an increase in activity, the bond market will probably fall and mortgage rates will rise slightly. If it shows weaker than expected readings, the bond market may rally and mortgage rates should f all. Current forecasts are calling for a 0.2% decline from July’s reading.
I am still expecting to see more volatility in the markets and potentially mortgage rates. Accordingly, please maintain fairly constant contact with your mortgage professional if you have not locked an interest rate yet.
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.
Daily Rate Lock Recommendation – 08/20/2008 12:21:00 PM EST
Wednesday’s bond market has opened up slightly despite stock gains and a lack of economic news on the day’s agenda. The stock markets are showing solid gains after earlier weakness this week. The Dow is currently up 68 points and the Nasdaq up 21 points. The bond market is currently up 6/32, but we will likely see little change in this morning’s mortgage rates. There is no relevant economic news scheduled for release today. The bond market will likely be influenced by stock swings if we are to see any afternoon changes to mortgage rates today. Stocks of mortgage giants Fannie Mae and Freddie Mac have come under fire again and have posted considerable losses this week as investors become more concerned about their stability and the housing market. This could influence mortgage rates also if the fears continue to rise and should be kept on our radar. Early tomorrow morning, the Labor Department will post last week’s new unemployment claims numbers. They are expected to fall by 12,000 claims from the previous week to 438,000 new claims. A larger than expected number of claims would be considered good news for bonds and mortgage rates, however, this is not one of the more important reports we see each week. Therefore, unless the number varies greatly from forecasts its impact on rates will probably be minimal. The Conference Board will give us the last piece of monthly data for the week late tomorrow morning when it releases its Leading Economic Indicators (LEI) for July. This index attempts to measure economic activity over the next three to six months. A higher than expected reading is bad news for the bond market because it indicates that the economy may be strengthening. However, a weaker than expected reading means that the economy may slow in the near future, making stocks less appealing to investors. This also eases inflation concerns in the bond market and could lead to slightly lower mortgage rates tomorrow if the stock markets remain calm. Current forecasts are calling for a decline of 0.3% in the index. If I were considering 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. |
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Daily Rate Lock Recommendation – 07/21/2008 12:02:00 PM EST
Daily Rate Lock Recommendation – 07/20/2008 10:51:00 PM EST
This week will be interesting for the bond market and mortgage rates. There are six economic reports scheduled for the financial and mortgage markets to digest, but only one of them is considered to be of high importance to the markets. But with data being posted all but one day of the week, we may see some fluctuations from day to day in mortgage pricing. The first report of the week comes tomorrow morning with the release of June’s Leading Economic Indicators (LEI) at 10:00 AM. This Conference Board index attempts to measure economic activity over the next three to six months. While it is not a factual report, it still is considered to be of relative importance to the bond market. It is expected to show a 0.1% increase, meaning that we may see a slight increase in economic activity over the next few months. A decline in the index would be good news for the bond and mortgage markets. The Federal Reserve will release its Beige Bo ok report Wednesday afternoon. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. With Fed Chairman Ben Bernanke’s testimony last week, I don’t think we will see any significant surprises in this report, and therefore will likely not cause much movement in mortgage rates Wednesday afternoon. There are two housing sector related releases scheduled for Thursday and Friday, but I don’t think they will have much of an impact on the bond market or mortgage rates. June’s Existing Home Sales will be posted Thursday while New Home Sales will be released Friday. I would expect that other reports or factors will drive bond trading and mortgage pricing much more than these will. Friday brings us the release of two of the week’s most important reports. The first will come from the Commerce Department when they will post June’s Durable Goods Orders at 8:30 AM ET. Current forecasts are currently calling for a gain of 0.1% after showing little change in new orders during May. This data gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items. These are products that are expected to last at least three years. A stronger than expected number may lead to higher mortgage rates Friday morning. If it reveals a smaller than expected rise or a decline, mortgage rates should drop Friday. Also being released Friday is the final revision to July’s University of Michigan Index of Consumer Sentiment. Unless we see a drastic revision to the preliminary estimate, I think the markets will probably shrug this news off. Overall, this is a moderately significant week for the bond market and mortgage rates. If we get weaker than expected economic results, we may see mortgage rates move low er for the week. However, stronger than expected results will likely lead to higher rates for the week. We also have a 5-year Treasury Note auction Thursday that may influence bond trading but will also give us an indication of investor appetite for bonds. Generally speaking, despite the lack of a data-packed calendar, I would still maintain constant contact with your mortgage professional. 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. |
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Daily Rate Lock Recommendation – 07/18/2008 12:11:00 PM EST
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Friday’s bond market has opened well in negative territory as investors continue to shy away from inflation-threatened securities. The stock markets are mixed during morning trading with the Dow up 38 points and the Nasdaq down 23 points. The bond market is currently down 21/32, which will likely push this morning’s mortgage rates higher by another .375 of a discount point.
There is no relevant economic data scheduled for release today, but this morning’s bond losses don’t come as a surprise. It appears that the sentiment in the bond market has turned more pessimistic than optimistic, partly due to inflation concerns. That has led to bonds and long-term securities becoming of less interest to investors. The result is bond prices falling as they are sold and mortgage rates rising. Unfortunately, I am not so sure that this is the end of the selling, so please be careful if still floating an interest rate.
There are a couple of reports scheduled for release next week that are relevant to mortgage related bonds and rates. However, none are considered to be of extremely high importance to the markets. The first comes Monday morning with the release of June’s Leading Economic Indicators (LEI). This report is considered to be moderately important to the markets.
The rest of the week brings is insight to housing sales, manufacturing activity for big-ticket items and the Fed Beige Book that breaks down economic activity in the U.S. by region. Look for more details on these and the rest of the upcoming week’s events in Sunday’s weekly preview.
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 fin ancing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
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