Daily Market commentary

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 well in positive territory, recovering yesterday’s afternoon losses. The major stock indexes are in positive ground with the Dow up 39 points and the Nasdaq up 22 points. The bond market is currently up 17/32, but due to weakness late yesterday, this morning’s improvement in mortgage rates will be limited to approximately .125 - .250 of a discount point if comparing to Monday’s early pricing. There is nothing of importance set for release today that is expected to influence bond trading or mortgage rates. There doesn’t appear to be anything significant or factual behind this morning’s improvements to bonds and mortgage rates. Enjoy the rebound today, but proceed cautiously if still floating an interest rate. The week’s first economic data will be posted late tomorrow morning when the National Association of Realtors releases July's Existing Home Sales report. It will give us a measurement of housing sector strength and mortgage credit demand by tracking home resales in the U.S. Since it covers a very high percentage of all home sales in the U.S., it draws attention but usually does not have a major influence on bond trading and mortgage rates unless it varies greatly from analysts' forecasts. Tomorrow’s report is expected to show an increase from June's sales, meaning the housing sector strengthened last month. This would generally be bad news for the bond market and mortgage rates because a strengthening housing sector makes broader economic growth more likely. However, unless the increase is much larger than current forecasts, the report will likely have a minimal impact on mortgage pricing tomorrow morning. Tomorrow afternoon brings us the release of the minutes from the last FOMC meeting. There is a pretty good possibility of the markets reacting to them as market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy, economic growth and the Fed’s plans for their current bond buying program (QE3). The goal is to form opinions about when Chairman Bernanke and friends are likely to start tapering their current $85 billion monthly bond purchases. Since the minutes will be released at 2:00 PM ET, if there is a market reaction to them it will be evident during afternoon trading. This is one of those events that can cause significant movement in rates or be a non-factor, so be prepared for a move, but not surprised if the impact on rates is minimal. 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