shift funds
Daily Mortgage Rate Lock Advisory for Friday 08/07/09
Friday’s bond market has opened down sharply following the release of stronger than expected employment numbers. The stock markets are reacting favorably to the data with the Dow up 136 points and the Nasdaq up 32 points. The bond market is currently down 28/32, which should push this morning’s mortgage rates higher by approximately .375 – .500 of a discount point compared to yesterday’s morning rates.
The Labor Department reported this morning that only 247,000 jobs were lost last month and that the U.S. unemployment rate fell to 9.4%. Both of these readings were stronger than expected. Analysts had forecasted a job loss of 328,000 and an increase on the unemployment rate of 0.1% to bring it to 9.6%. In addition, average hourly earnings also exceeded forecasts with a 0.2% increase.
Today’s news was definitely negative for bonds and mortgage rates. It indicates that the employment sector is not as bad as many had thought. While it was still softening last month, it was at a much slower pace than expected. That helps support the theory that the recession may be nearing an end. In fact, some analysts are already stating they think it has ended. This is bad for bonds because economic growth often creates an environment with inflation concerns that make bonds less attractive to investors. The result usually ends up being higher mortgage rates as investors shift funds into a growing stock market.
Next week is another busy one for the markets and mortgage rates. There are several very important economic releases scheduled to be posted in addition to another FOMC meeting that can heavily influence bond trading and mortgage rates. None of them is due out Monday, but there is relevant data or events scheduled for every other day of the week. 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…
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.
Daily Mortgage Rate Lock Advisory – Friday Nov. 21st
Rate Lock Advisory – Friday Nov. 21st
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Friday’s bond market has opened sharply lower, giving back much of its gains from the past two days. The stock markets are showing gains but no major rebound from yesterday’s beating. The Dow is currently up 35 points after falling 444 points yesterday while the Nasdaq has gained 8 points. The bond market is not having a good day, currently down 39/32, as investors shift funds back out of bonds. This will likely push this morning’s mortgage rates higher by approximately .375 of a discount point.
Today’s losses effectively erase yesterday’s rally that pushed yields on the major Treasury bonds and Notes to their lowest levels since 1962. As is often the case, the funds will move out of bonds just as quickly, if not faster as they flowed in. The result usually is a spike in mortgage pricing as investors move away from the safety appeal that led to funds being moved into bonds earlier this week.
There is no relevant economic data scheduled for rel ease today. I would not be surprised to see further volatility in the stock and bond markets as the day progresses. This may affect mortgage rates this afternoon if bonds recover some of their losses or fall much further form their current levels.
Next week is pretty busy in terms of economic releases scheduled to be posted but also is a holiday shortened week. Monday brings us the release of October’s Existing Home Sales data that will give us a measurement of housing sector strength. It is expected to show a decline in home resales last month. But look for more details on next week’s data and events in Sunday’s weekly preview of the upcoming week.
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… T his 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 Nov. 12th
Rate Lock Advisory – Wednesday Nov. 12th
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Wednesday’s bond market has opened in positive territory as investors shift funds from stocks into bonds. This has pushed the stock indexes significantly lower again with the Dow down 312 points and the Nasdaq down 46 points. The bond market is currently up 14/32, which should improve this morning’s mortgage rates by approximately .125 – .250 of a discount point over Monday’s rates. The bond market was closed yesterday in observance of the Veteran’s Day holiday.
There is no relevant data being released today, but we will get the results of today’s 10-year Treasury Note auction at 1:00 PM ET. These results can influence bond trading enough to affect mortgage rates this afternoon. If the sale was met with a strong demand from investors, bonds will likely rally and mortgage rates should fall. However, a lackluster interest could lead to weakness in bonds and higher mortgage rates.
The first economic data of the week is September’s Goods and Service s Trade Balance report Thursday morning. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which makes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities’ proceeds are worth more when sold and converted to the investor’s domestic currency. However, its results will not likely directly lead to changes in mortgage rates.
Overall, look for a fairly quiet week in the mortgage market compared to previous weeks unless something totally unexpected transpires. The two Treasury auctions that are of the most interest are today’s and Thursday’s since they can impact mortgage rates the most. But there is only one important report being posted and that doesn’t come until Friday morning.
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 – 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.
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