Market update

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Friday’s bond market has opened in negative territory even though stocks are not showing much strength. The major stock indexes are posting minor losses with the Dow down 21 points and the Nasdaq down 4 points. The bond market is currently down 3/32, which should push this morning’s mortgage rates higher by approximately .125 of a discount point. Yesterday’s 30-year Treasury Bond auction went much better than Wednesday’s 10-year Note sale. This helped boost bond prices once the results of the sale were posted at 1:00 PM ET yesterday, but I don’t believe that it was enough of a move for many lenders to improve rates intraday. Although, it was a bit of good news in what has been somewhat of a bleak week so far for bonds and mortgage pricing. Today’s only economic data was November's Goods and Services Trade Balance that revealed a much larger than expected $48.7 billion trade deficit. Analysts had forecasted a $41.8 billion trade deficit. However, the news hasn’t affected trading or mortgage rates since it is considered to be a low-importance report. Next week brings us the release of much more for the markets to digest than we saw this week. Some of the economic reports include two highly important inflation readings and a key measurement of consumer spending, some manufacturing and housing data in addition to the Fed’s Beige Book report that details economic activity by Fed region. With little data released this week, expect those reports to heavily influence the markets and mortgage rates next week. Monday has nothing of importance scheduled during trading hours, so any news from over the weekend or sizable stock movement will drive bond sentiment and mortgage rate changes that day. There is a public speaking engagement by Fed Chairman Bernanke Monday afternoon, but it will be after the markets have closed. This means we won’t see a reaction to it until Tuesday’s open. Look for more details on next week’s agenda 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...       Alan Russell 161 South San Antonio Rd. | Los Altos, CA 95022 Ph: 650-947-2296 ? Fax: 408-335-1118 alanrussell@princetoncap.com CLICK HERE TO STOP RECEIVING OUR REPORT