Todays market update

Tuesday’s bond market has opened in negative territory as both stocks and bonds seem to be directionless at the present time. Stocks are mixed with the Dow up 27 points and the Nasdaq down almost 2 points. The bond market is currently down 4 points, but due to a little strength in trading late yesterday, we should see this morning’s mortgage rates to be very close to Monday’s pricing. Today’s calendar has nothing scheduled for release that is expected to affect mortgage pricing. If the stock markets make a move either direction, bonds will likely move the opposite. Stock gains could lead to upward revisions in rates this afternoon while weakness should translate into bond strength and possibly an improvement in mortgage rates later today. The Commerce Department will post January's Retail Sales data early tomorrow morning. It is one of the more important reports we see each month because it gives us detailed figures on consumer spending. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched quite closely. If tomorrow’s report reveals weaker than expected retail-level sales, the bond market should thrive and mortgage rates will fall as it would be a sign that the economy is not as strong as many had thought. However, a stronger reading than the 0.1% increase that is expected could lead to higher mortgage rates. Tomorrow also has the first of two important Treasury auctions this week that could influence mortgage rates. 10-year Notes will be sold tomorrow and 30-year Bonds go to auction Thursday. The 10-year sale is the more important of the two as it will give us an indication for demand of mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would likely result in upward afternoon revisions to mortgage rates. Results of the sale will be posted at 1:00 PM ET, so any reaction will come during afternoon hours. 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