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Friday’s bond market has opened up slightly following the release of
somewhat favorable economic news. The stock markets are also showing
fairly minor gains with the Dow up 33 points and the Nasdaq up 23 points.
The bond market is currently up 5/32, but due to weakness in trading late
yesterday we will likely see little change in this morning’s mortgage
rates.
The Commerce Department gave us the first of today’s two relevant economic
reports. They announced at 8:30 AM ET that new orders for durable goods
or big-ticket products rose 3.7% last month, nearly matching forecasts of
a 3.5% increase. That was not enough of a variance in this volatile data
to cause any concern or joy in the bond and mortgage markets. Although,
it is a solid growth number, indicating that the manufacturing sector
grew during the month. However, a secondary reading that excludes high
cost and more volatile transportation-related orders, such as new
airplanes, came in with a 0.1% decline when it was expected to rise 0.3%.
Therefore, we should consider the data neutral to slightly positive for
the bond market and mortgage rates.
At 9:55 AM ET this morning, the University of Michigan posted their
revised Index of Consumer Sentiment for this month. It showed a reading
of 73.2 that fell short of the 74.5 that was expected and was a decline
from the preliminary reading of 75.2. This means that surveyed consumers
were less optimistic about their own financial and employment situations
than previously thought, likely due to the government shutdown the first
half of the month. That is fairly good news for the bond and mortgage
markets because waning confidence usually translates into weaker levels
of consumer spending that restricts overall economic growth.
Unfortunately, this was a relatively minor miss in a moderately important
report, so the impact it has had on this morning’s bond trading and
mortgage pricing has been minimal.
Next week is likely to be an active one for the financial markets and
mortgage rates. We do get data Monday with the release of September’s
Industrial Production report before we head into key readings of consumer
spending and inflationary pressures Tuesday and Wednesday. There is also
a two-day FOMC meeting and a couple of fairly relevant Treasury auctions
the middle part of the week. We then close with a very influential
reading of manufacturer sentiment Friday morning. We won’t get October’s
Employment report Friday as originally scheduled because the shutdown
pushed it back to the following Friday. Look for details on all of 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... Lock 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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