Todays market update

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.           Tuesday’s bond market has opened in positive territory following negative comments about the European economy from an overseas Central Bank official that also has prevented stocks here from extending yesterday’s gains. The Dow is currently down 3 points while the Nasdaq has lost 6 points. The bond market is currently up 10/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point. There is nothing of relevance scheduled for release today, but tomorrow starts the heavy activity. First on the week’s agenda is February's Retail Sales data that will be posted by the Commerce Department early tomorrow morning. This data is extremely important to the financial markets because it measures consumer spending. Since consumer spending makes up over two-thirds of the U.S. economy, data that is related usually has a big impact on the markets. This month's report is expected to show an increase in sales of approximately 0.5%. If it reveals a larger than expected increase, the bond market will likely fall and mortgage rates will move higher as it would indicate a stronger level of economic growth than many had thought. If it reveals a much smaller than expected increase, I expect to see bond prices rise and mortgage rates improve tomorrow morning. Tomorrow also has the first of two Treasury auctions scheduled this week that could potentially affect mortgage rates. The first is the 10-year Treasury Note auction tomorrow while the other is the 30-year bond sale Thursday. Results of both sales will be posted at 1:00 PM ET on the sale days. If investor demand was high, we may see bonds rally during afternoon trading as it would hint that investors still have an appetite for longer-term securities. However, weak demand in the sale could lead to selling and an increase in mortgage rates late tomorrow and/or Thursday. Tomorrow is likely to be one of the more active days of the week for mortgage rates. The yield on the benchmark 10-year Treasury Note is still above 2.00% (currently 2.02%). This is troublesome for mortgage rates if it remains above that threshold the next couple days as it could become a floor of support. Since mortgage rates follow bond yields, it would mean rates are more likely to rise than move much lower in the immediate future. The rest of the week will tell us a lot about which direction bond yields and mortgage pricing will be headed in the near future, so please be cautious of still floating an interest rate and closing soon. 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...       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