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Thursday’s bond market has opened relatively flat after this morning’s
economic data was relatively uneventful. The stock markets are showing
losses with the Dow down 56 points and the Nasdaq down 24 points. The bond
market is currently is up 3/32, which may improve this morning’s mortgage
rates by approximately .125 of a discount point.
Yesterday’s release of the Fed Beige Book didn’t yield any significant
surprises. It indicated that economic growth was modest to moderate in most
of the Fed regions and that inflation remained subdued. The housing sector
did show signs of strength during the period, which ran from late February
to early April. Generally speaking, there was nothing worth getting concerned
or excited about. Therefore, it had little impact on the markets after its
release at 2:00 PM ET yesterday.
The Labor Department gave us the first of today’s two pieces of economic
data that was worth watching. They announced that 352,000 new claims for
unemployment benefits were filed last week, up from the previous week’s
revised total of 348,000. The number of initial claims last week was
slightly higher than forecasts, but it was not enough of a difference to
cause alarm in the bond market or joy in the stock markets. Just the fact
that we saw an increase indicates the employment sector softened a little
last week, making the data neutral to slightly favorable for the bond
market and mortgage rates.
Late this morning, the Conference Board posted their Leading Economic
Indicators (LEI) for March. It showed a 0.1% decline that was slightly
weaker than expected. This means the indicators are pointing towards little
economic growth over the next several months, so we can consider the data
favorable for the bond market and mortgage rates although it was not enough
of a decline to really impact this morning’s markets.
Tomorrow has nothing of importance scheduled for release that is likely to
affect mortgage rates. This leaves the stock markets to be the biggest
influence on bond trading and changes to mortgage rates. If we see sizable
stock gains, bonds will likely be pressured, leading to slightly higher
mortgage rates. On the other hand, if the up and down pattern in stocks
continues tomorrow, we are due to see the major stock indexes in negative
territory. If that is the case, we should see a positive morning in bonds
with a slight improvement to mortgage pricing.
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...
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