August 26th, 2016 10:00 AM by T. Fanning
Last Updated: 8/26/16Friday's bond market has opened in positive territory despite early stock gains and mediocre results in today's economic data. The major stock indexes are showing noticeable gains during early trading with the Dow up 91 and the Nasdaq up 31. The bond market is currently up 10/31 (1.54%), but we should see an improvement in this morning's mortgage rates of less than .125 of a discount point.Yesterday's 7-year Treasury Note auction was not met with much of an investor demand. Fortunately for mortgage shoppers, the bond market had little reaction when results were posted at 1:00 PM ET. Therefore, there was no impact on mortgage pricing also.The first revision to the 2nd Quarter Gross Domestic Product (GDP) reading kicked off today's events at 8:30 AM ET. It showed the GDP rose at a 1.1% annual pace during the 2nd quarter. This was slightly lower than the initial estimate of 1.2%, but matched what analysts were expecting to see. With no surprise and the data somewhat aged now, we haven't seen much a reaction to the news in the bond or mortgage markets.Next up was the University of Michigan's revised Index of Consumer Sentiment for August just before 10:00 AM ET. They announced a reading of 89.8 that fell short of forecasts. That was also a decline from the preliminary reading of 90.4, meaning surveyed consumers were less optimistic about their personal financial situations than many had thought. This is favorable news for bonds because weaker levels of confidence usually translates into softer consumer spending that fuels economic growth.Fed Chair Janet Yellen's speech this morning in Jackson Hole didn't really give us anything new or too surprising. She did indicate that the economy is ready for another rate hike, but didn't say when it will come. The majority of market participants are predicting a December rate hike with a few saying it will come next month. I believe the markets are not expecting the Fed to make a move next month, so doing so could be quite negative for the bond market and mortgage rates. Generally speaking, the Fed tries to avoid monetary policy moves too close to Election Day, so many feel a rate hike during November's meeting is not likely.Next week is pretty busy in terms of economic reports scheduled for release that could affect mortgage rates. There is data set to be posted each day with the two highly important releases coming late in the week. There is fairly important data coming early Monday with the release of July's Personal Income and Outlays report. Look for details on it and the rest of the week's activities in Sunday evening's weekly preview.If I were considering financing/refinancing a home, I would....Lock if my closing were taking place within 7 days...Lock if my closing were taking place between 8 and 20 days...Lock if my closing were taking place between 21 and 60 days...Lock if my closing were taking place over 60 days from now...This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.http://www.hlmcolorado.com/DailyRateAdvisory
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