Todays market open off a little more

Greetings! Here's your Daily Commentary report compliments of
Alan Russell & Princeton Capital!
Call me today for current rates and market information at (650) 947-2296.

Thursday’s bond market has opened in negative territory again after this morning’s economic data gave us somewhat stronger than expect results. The major stock indexes are in positive ground yet again, contributing to the early pressure in bonds. The Dow is currently up for the 10th consecutive day with a gain of 46 points while the Nasdaq has gained 6 points. The bond market is currently down 9/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point. Limiting this morning’s increase is strength from afternoon trading yesterday that caused some lenders to revise pricing lower late in the day. If your lender did improve rates yesterday afternoon, you may see a bit more of an increase in this morning’s pricing. Both of this morning’s economic reports gave us results that were slightly negative for the bond market and mortgage rates. The more important of the two was February's Producer Price Index (PPI) that revealed a 0.7% increase in the overall reading and a 0.2% increase in the core data. The overall reading was slightly higher than forecasts but the more important core reading matched expectations. This means that while inflationary pressures rose at the producer level of the economy last month, it was not much more than what analysts were expecting to see. Still, we should consider the data slightly negative for the bond market and mortgage rates. The Labor Department also announced early this morning that 332,000 new claims for unemployment benefits were filed last week. This was a drop from the previous week’s revised total of 342,000 initial claims and much lower than the 350,000 that was forecasted, indicating that the employment sector was stronger than thought last week. That makes the data bad news for the bond and mortgage markets. We also have today’s 30-year Bond auction to watch. Yesterday’s 10-year Note sale actually went very well with several benchmarks we use to gauge investor demand showing a strong level of investor interest. That helped to boost bond prices during afternoon trading yesterday and gives us something to look forward to this afternoon. If investor demand was higher for this sale also, we could see the bond market strengthen after the results are posted at 1:00 PM ET. This could lead to afternoon improvements in mortgage rates, but gains in stocks could make it difficult for bonds to move enough to cause lenders to post an intraday revision to rate sheets. Tomorrow morning brings us the release of three economic reports that may influence mortgage rates. February's Consumer Price Index (CPI) will be released early tomorrow morning, which measures inflationary pressures at the very important consumer level of the economy. Its results can definitely have a huge impact on the bond market, especially long-term securities such as mortgage-related bonds. It is expected to show a 0.5% increase in the overall index and a 0.2% rise in the more important core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall tomorrow. The day's second report will come mid-morning when February's Industrial Production report is posted. This report measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.4% increase from January's level. A decline would be considered extremely favorable news for bonds and mortgage rates because it would indicate manufacturing sector weakness and a broader economic recovery is more difficult if manufacturing activity is slipping. The week's final piece of data is the University of Michigan's Index of Consumer Sentiment for March just before 10:00 AM ET. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending levels and economic growth. A drop in confidence will probably hurt the stock markets and boost bond prices, leading to lower mortgage rates, assuming the CPI matches forecasts. Bad news for bonds and mortgage rates would be rising confidence. It is expected to show a reading of 77.6, which would be no change from February's final reading of 77.6. 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...       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