Daily mortgage update

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.           Tuesday’s bond market has opened down slightly with today’s only relevant economic data showing unfavorable results. The major stock indexes appear to be closing out the year on a positive note with the Dow up 32 points and the Nasdaq up 9 points. The bond market is currently down 3/32, but due to strength in trading late yesterday, we should still see a slight improvement in this morning’s mortgage rates if comparing to Monday’s early pricing. Today’s only relevant economic news came from the Conference Board at 10:00 AM ET. The New York-based business research group announced that their Consumer Confidence Index (CCI) for December stood at 78.1. This was higher than expected and a sizable jump from November’s revised reading of 72.0. That indicates that consumers were more optimistic about their own financial and employment situations than many had thought. A decent sized increase was expected, softening the impact of the news on this morning’s trading. Still, rising levels of confidence usually translates into more consumer spending and economic growth. Therefore, we should consider the data slightly negative for mortgage pricing. We have an early closing in the bond market today ahead of tomorrow’s holiday, but the stock markets will be open for a full day of trading. The bond market will close at 2:00 PM ET today, so I would not expect to see a lender rate change much after that. All banks and major U.S. financial markets will be closed tomorrow in observance of the New Year’s Day holiday (so no Wednesday update to this report) and will reopen Thursday morning for regular hours. I would not be surprised to see trading volume thin as the day progresses, so movement in bond prices is still likely. However, I don’t expect it to be as bad as some days last week. When the markets reopen Thursday, we have two pieces of economic data to watch. The first is the weekly unemployment update from the Labor Department. They are expected to announce that 333,000 new claims for unemployment benefits were filed last week, down from the previous week’s total of 338,000. Rising initial claims is a sign of a softening employment sector and leads to wider economic concerns. Therefore, a sizable increase would be favorable to the bond market and mortgage rates. It is worth noting though, that since this report tracks only a single week’s worth of new filings, it usually takes a wide variance from forecasts for the data to directly impact mortgage rates. The Institute for Supply Management (ISM) will post their manufacturing index for December at 10:00 AM ET morning. This highly important index measures manufacturer sentiment and can heavily influence the financial and mortgage markets. Part of its significance comes from the fact that it is the first monthly report we get that tracks the preceding month’s activity. A reading above 50 means that more surveyed manufacturing executives felt that business improved during the month than those who felt it had worsened. That indicates manufacturing sector strength rather than contraction. Analysts are currently expecting to see a 56.9 reading in this month's release, meaning that sentiment softened from November's 57.3. A smaller reading will be good news for the bond market and mortgage shoppers, while a higher than expected reading could lead to higher mortgage rates Thursday morning as it would point towards stronger economic growth. If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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