Wednesday’s bond market has opened in positive territory with nothing of
importance scheduled today and stocks showing early losses. The major
stock indexes are showing noticeable losses with the Dow down 88 points
and the Nasdaq down 40 points. The bond market is currently up 6/32,
which should improve this morning’s mortgage rates by approximately .1250
- .250 of a discount point over yesterday’s early pricing.
There is nothing scheduled for release today that is likely to affect
bond trading or mortgage rates. Stocks are helping to boost bonds during
morning trading with a negative reaction to some earnings data. If stocks
extend their current losses, we could see bond prices move higher as the
day progresses and possibly a slight improvement to mortgage rates. If
they remain near current levels, I suspect rates will follow suit.
Tomorrow has two minor pieces of economic data that we will be watching.
The first is the weekly unemployment update from the Labor Department.
They are expected to announce that 341,000 new claims for unemployment
benefits were filed last week, down from the previous week’s 358,000
initial claims. The higher the number of new claims, the better the news
for the bond market and mortgage pricing because rising unemployment
claims indicates employment sector weakness. However, since this data
tracks only a single week's worth of new claims, its impact on the
markets is usually minimal unless it shows an unexpected spike or sizable
drop in filings.
August's Trade Balance report will also be released early tomorrow
morning. It gives us the size of the U.S. trade deficit but is the week's
least important report and likely will have little impact on the bond
market and mortgage rates. Analysts are expecting to see a $38.6 billion
deficit, but it will take a wide variance from forecasts to directly
influence 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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