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.           Friday’s bond market has opened fairly flat with this morning’s economic data giving us mixed results. The stock markets are showing minor losses during early trading with the Dow down 31 points and the Nasdaq down 17 points. The bond market is nearly unchanged from yesterday’s closing level, but we should still see an improvement of approximately .125 - .250 of a discount in this morning’s mortgage rates due to strength late yesterday. Yesterday’s 7-year Treasury Note auction went better than Wednesday’s 5-year Note sales did, but was still not very impressive. Many of the benchmarks we use to gauge investor demand showed average interest at best. Fortunately, the news didn’t have too much of an impact on the broader bond market as bond prices improved from their morning levels, causing some lenders to improve their rates later in the day. The first of this morning’s two economic releases was July's Personal Income and Outlays report at 8:30 AM ET. It revealed a 0.1% increase in personal income last month while spending rose by the same. The income reading matched forecasts however, the spending reading was weaker than many had expected (0.3%). That makes the data good news for the bond and mortgage markets because slower than expected consumer spending means the economy likely will not grow as much as predicted. Since consumer spending makes up about 70% of our economy, any data related to it is watched fairly closely. Late this morning, the University of Michigan announced that their Index of Consumer Sentiment for August actually stood at 82.1. This was an upward revision to the preliminary reading of 80.0 that was posted earlier this month and exceeded forecasts of little change. That means that surveyed consumers were a little more optimistic about their own financial situations than many had thought. And since rising confidence usually means consumers are more apt to make a large purchase in the immediate future, we should consider this data negative for mortgage rates. Next week brings us the release of some key economic data including the ISM manufacturing index and the almighty Employment report that could easily influence the Fed’s tapering decision at their next FOMC meeting later in the month. The financial and mortgage markets will be closed Monday in observance of the Labor Day holiday and will reopen Tuesday morning for regular trading. There is no early close for stocks or bonds today, but it would not be surprising to see volume lighten up as many traders head home for the long weekend. Look for details on next week’s events 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... 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