Friday’s bond market has opened in negative territory despite sizable stock losses. The stock markets in selling mode with the Dow down 145 points and the Nasdaq down 40 points. The bond market is currently down 3/32, which will likely keep this morning’s mortgage rates at yesterday’s levels.

July’s Personal Income and Outlays was the first piece of economic data posted this morning. It showed that spending rose 0.2% as it was expected to, but a surprising drop of 0.7% in income was the largest decline in three years. This indicates that consumers have less income to spend than thought, which will likely translate into slower consumer spending. That is considered good news for bonds and mortgage rates.

August’s revision to the University of Michigan’s Index of Consumer Sentiment was also posted, showing a 63.0 reading. That was a full point higher than analysts had predicted, meaning that consumers were more optimistic about their own financia l situations than many had thought. This is considered bad news for bonds and mortgage pricing because increasing sentiment usually means consumers are more willing to make large purchases in the near future.

The bond market will close at 2:00 PM ET today ahead of the Labor Day holiday. It will remain closed Monday and reopen Tuesday morning. The stock markets will be closed Monday also. It does not appear that this early close is going to affect trading much, but I have extended the lock recommendation to short-term period closings as a precautionary move.

Next brings us the release of a couple of important reports, including Tuesday’s release of August’s ISM manufacturing index that measures manufacturer sentiment. We also will get August’s employment figures next week along with a couple of other relevant releases. Look for more details on next week’s events in Sunday’s weekly preview.

If I were considering financing/refinancing a hom e, 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.