major stock indexes
Daily Mortgage Rate Lock Advisory – Thursday June 19, 2009
Friday’s bond market has opened in positive territory as investors digest the week’s events. The stock markets are showing gains with the Dow up 50 points and the Nasdaq up 22 points. The bond market is currently up 4/32, but we will still see an increase in this morning’s mortgage rates due to weakness late yesterday.
There is no relevant economic data scheduled for release today. This makes it likely that bonds will be influenced mostly by changes in the stock markets today. As long as the major stock indexes remain calm, I would expect bonds and mortgage rates to follow suit. If the stock markets give back this morning’s gains, bonds may react favorably as the day goes on. However, afternoon weakness seems to be routine lately so we should go into the weekend with a cautious approach.
Next week is fairly active in terms of economic releases. There are several scheduled for release
that may influence mortgage pricing, but we also have an FOMC meeting on the calendar next week. In addition to those items, there is another round of Treasury auctions on the agenda that may also affect bond trading and mortgage rates.
None of the economic data or relevant events take place on Monday, so look for it to be a day of preparation for the week’s events. Unless something positive happens or is announced over the
weekend, there is little to lead us to believe Monday will be a strong day for bonds. But look for more details on next week’s data and relevant events in Sunday’s weekly preview.
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.
Daily Mortgage Rate Lock Advisory – Thursday Mar. 5th
Rate Lock Advisory – Thursday Mar. 5th
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Thursday’s bond market has opened strong following early stock weakness. The major stock indexes are showing significant losses after yesterday’s rally. The Dow is currently down 230 points while the Nasdaq is down 42 points. The bond market is currently up 34/32, but we will likely see an improvement in this morning’s mortgage rates of only .125 – .250 of a discount point.
This morning’s economic news gave us results that were not favorable to bonds and mortgage rates. The Productivity revision revealed a much lower level of worker output than was expected. Today’s report showed a decline in output of 0.4% compared to the increase of 1.0% that was forecasted and the 3.2% gain that was estimated last month. It also showed a significant upward revision to the Unit Labor Costs portion of the report that raises wage inflation concerns. Even though this report is of medium importance to the markets, the revised readings are somewhat surprising.
The second report of the morning wasn’t much better either. The Commerce Department reported that Factory Orders fell 1.9% in January. This was stronger than analysts’ revised forecasts of a 3.5% decline, but today’s reports also revised December’s orders lower by 1.0%. That seemed to have offset the higher than expected reading, but this report is also considered to be of medium importance so its impact has been relatively minimal.
The Labor Department reported that 639,000 new claims for benefits were filed last week. This was lower than expected and a decline from the previous week’s total.
Tomorrow morning brings us February’s Employment report at 8:30 AM ET tomorrow. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and mortgage rates would be an increase in the unemployment rate, a large drop in pa yrolls and little or no increase in earnings. Current forecasts are calling for 0.3% increase in the unemployment rate to 7.9% and approximately 650,000 jobs lost during the month.
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.
Weekly Mortgage Rate Lock Advisory – Sunday Dec. 28th
Rate Lock Advisory – Sunday Dec. 28th
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This week brings us the release of only two pieces of economic news that are relevant to mortgage rates. It is another holiday-shortened week with the New Years Day holiday Thursday, so the data may have a heavier impact on trading than usual if it varies from forecasts by much. The bond market will close early Tuesday and possibly Friday as they did last week. With that type of schedule, many traders will not be working Wednesday or Friday, so any unexpected news or data may lead to a larger than usual reaction in the markets.
There is no relevant news scheduled for tomorrow. Look for any significant changes in stocks to drive bond trading and mortgage rates. If the major stock indexes remain fairly calm, it is possible that bond prices and mortgage rates may follow suit. However, I still believe there is a possibility of seeing year-end weakness in bonds that may drive mortgage rates higher. Accordingly, I am still recommending to proceed with caution of still floating an interest rate.
The first important release comes late Tuesday morning when the Conference Board will post its Consumer Confidence Index (CCI) for December. This is a pretty important release because it measures consumer willingness to spend. If consumers are more confident in their personal financial situations, they are more apt to make large purchases. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely by market participants and can have a significant influence on mortgage rate direction. Current forecasts are calling for a minor increase confidence from November’s reading of 44.9. Analysts are expecting Tuesday’s release to show a reading of 45.2.
The financial markets will be closed Thursday in observance of the New Year’s Day holiday. They will reopen Friday morning with the release of the Institute for Supply Management’s (ISM) manufacturing index. This highly important index measures manufacturer sentiment. A reading below 50 means that more surveyed manufacturing executives felt that business worsened during the month than those who felt it had improved. Analysts are currently expecting to see a 35.4 reading in this month’s release, meaning that sentiment fell from November’s 36.2. A smaller reading will be good news for the bond market and mortgage shoppers while a higher than expected reading could lead to higher mortgage rates Friday morning.
Overall, I am still pessimistic towards mortgage rates, at least short-term. The week’s two reports are both considered important and can influence mortgage rates. If they report weaker than expected results, we could see rates close the week lower than last Friday’s closing levels. But, even if we get results that match forecasts, I suspect we will see selling in bonds and traders make year-end adjustments to their portfolios that could push mortgage rates higher for the week.
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 – 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 – Friday Oct. 10th
Rate Lock Advisory – Friday Oct. 10th
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Friday’s bond market has opened down sharply again despite an extremely volatile morning in stocks. The stock markets initially opened with huge losses then recovered, but are now sliding again. The Dow is currently down 350 points after falling 700 points right after the morning bell. The Nasdaq is currently down 56 points, which is well off earlier lows and highs. The bond market is now down 29/32 despite the stock weakness. This will likely push this morning’s mortgage rates higher by another .375 of a discount point.
This sounds like a broken record, but it still is the situation that we are seeing. Last night’s major sell-off in the international markets has carried into this morning’s trading. The markets still seem to be lost and unable to gain any solid traction and I am surprised that bonds are still taking a hit with the major stock indexes in a free-for-all downward spiral. But, until we see some stabilization, it is nearly impossible to make an educated guess of which direction the markets and mortgage rates will move.
August’s Goods and Services Trade Balance was released this morning, revealing a $59.1 billion trade deficit. This nearly pegged forecasts, so as expected has had no impact on this morning’s trading or mortgage rates.
Next week brings us the release of several important economic reports for the markets to digest. I would like to say this is good news for bonds as investors will have factual data to rely on and to influence trading. But, with the past two week’s volatility and little data being posted this week, I am a little scared to think of what could happen to the markets if we get much weaker or stronger than expected results. I would like to think that weak data will be favorable for bonds, but with stocks and bonds moving in the same direction currently, that news may not turn into lower mortgage rates. We will see.
The fun starts in the middle of the week, but the latter days of the week bring us some very important data. There are two key inflation readings, retails sales data and the Fed Beige Book amongst others. 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… 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.
Rate Lock Advisory – Tuesday Oct. 7th
Rate Lock Advisory – Tuesday Oct. 7th
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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.
Rate Lock Advisory – Tuesday Sep. 30th
Rate Lock Advisory – Tuesday Sep. 30th
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Tuesday’s bond market has well in negative territory following a stock rebound that has shifted funds back away from bonds. The stock markets are rebounding after yesterday’s walloping with the Dow up 260 points and the Nasdaq up 30 points. This means that the major stock indexes have recovered approximately one-third of yesterday’s losses. The bond market benefited form yesterday’s stock sell-off but is suffering today as investors move funds back into stocks. The result is the bond market down 13/32 that will likely push this morning’s mortgage rates higher by approximately .250 of a discount point.
Today’s only economic news was September’s Consumer Confidence Index (CCI). It showed a reading of 59.8 that was much higher than forecasts had called for. Analysts were expecting to see a reading of 55.0, meaning that consumers had more confidence in their own financial situation than was expected. This is considered bad news for bonds and mortgage rates because it indicates that consumers are more willing to make large purchases in the near future.
Tomorrow only relevant data is the Institute for Supply Management’s (ISM) manufacturing index for September. This index gives us an indication of manufacturer sentiment. Analysts are expecting to see a 0.4 decline from last month’s 49.9 reading. The 50.0 benchmark is extremely important because a reading below that level means more surveyed executives felt business worsened than those who said it had improved. This data is important not only because it measures manufacturer sentiment, but it is very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall tomorrow morning.
We need to keep an eye on the stock markets and Fed bailout attempt. I don’t think we will see much come today as the markets take a breather, but we probably will see more volatility in stocks before the end of the week. This could affect bond prices and mortgage rates. Generally speaking, look for stock weakness to lead to bond gains and lower mortgage rates as investors move funds into the safety of bonds. If the stock markets continue to move higher, we should see bonds suffer and mortgage rates move higher.
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 – Monday Sep. 22nd
Rate Lock Advisory – Monday Sep. 22nd
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Monday’s bond market has opened in negative territory despite another round of stock market losses. The major stock indexes are kicking the week off with sizable losses. The Dow is currently down 160 points while the Nasdaq has fallen 30 points. The bond market is currently down 15/32, which will likely push this morning’s mortgage rates higher by approximately .375 of a discount point.
There is no relevant economic news scheduled for release today. The rest of the week brings us the release of five economic reports for the markets to digest. Three of them are considered to be of low importance and likely will have little impact on mortgage rates. With none of the data being released until Wednesday, we will likely see the most activity in rates the latter part of the week.
The first piece of data comes Wednesday morning with the release of August’s Existing Home Sales report. The National Association of Realtors posts this data, giving us an indi cation of housing sector strength by tracking home resales in the U.S. It is expected to show a decline from July’s sales, however, this data is not considered to be of high importance to the bond market.
August’s Durable Goods Orders will be posted early Thursday morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts call for a drop in orders in the neighborhood of 1.3%. A larger decline could help bond prices and cause mortgage rates to drop Thursday. However, a smaller than expected decrease would indicate a stronger than expected manufacturing sector and would likely help push mortgage rates higher.
Also Thursday morning will be the release of August’s New Home Sales. It is expected to show that sales of new homes rose slightly in August. As with Wednesday’s Existing Home Sales data, this report will likely not have a significant impact on mortgage ra tes.
The first of Friday’s two releases is the final revision to the 2nd Quarter Gross Domestic Product (GDP). Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don’t see this revision having much of an impact on the financial markets or mortgage pricing. It is expected to show a slight increase from the previous estimate of a 3.3% annual rate.
The final report of the week is Friday’s release of the University of Michigan’s Index of Consumer Sentiment. This is the revised reading for September. The preliminary reading that was released earlier this month revealed a 73.1 reading. Analysts are expecting to see a downward revision, meaning confidence was not as higher as previously thought. A lower than expected reading should help improve mortgage rates Friday morning.
Overall, this will likely be a fairly active week for mortgage rates. The most important day will either be today or Thursday. We may see last week’s market volatility continue today and Thursday’s data is the most important of the week. Until the markets appear to have stabilized, I am holding the lock recommendations as it makes it difficult to predict what mortgage rates will do when we see such wild swings.
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 – 07/11/2008 12:06:00 PM EST
Daily Rate Lock Recommendation – 07/09/2008 12:03:00 PM EST
Wednesday’s bond market has opened relatively flat yet again, which seems to be the norm lately. The stock markets are following suit with the Dow and Nasdaq both down a couple of points. The bond market is currently up only 1/32, but due to strength in bonds late yesterday we should see an improvement of .250 – .375 of a discount point in this morning’s mortgage rates. There is no relevant economic news scheduled for release again today. I am expecting the stock markets, and possibly oil prices, to continue to be the biggest influence on bond trading the rest of the day. If the major stock indexes remain near current levels, mortgage rates will likely follow suit. However, if stocks or oil moves significantly, we likely will see a shift in bond trading and possibly mortgage pricing. I am remaining on the cautious side, particularly in the short-term outlooks. I think there is more likelihood of seeing bonds fall and mortgage rates move higher in the immediate future than there is of them improving much. Accordingly, I am holding the lock recommendations for immediate and short-term closings. The first piece of economic news that may affect mortgage rates is tomorrow weekly unemployment figures from the Labor Department. Analysts will be paying a little more attention to this week’s release than usual because last week’s report showed that claims had crossed above 400,000 the previous week. This is an important benchmark that will be watched closely. Last week’s numbers didn’t get much attention because they were posted at the same time as June’s monthly Employment report. But with little data scheduled for release this week, I believe more focus will be made on tomorrow’s report than usual. Current forecasts are calling for approximately 395,000 new claims to have been filed. If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 da ys… 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. |
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