November 2nd, 2018 12:35 PM by T. Fanning
Last Updated: 11/2/18Friday's bond market has opened in negative territory following stronger than expected employment news. The stock markets are not reacting to the data as we would have expected. The Dow is down 36 points while the Nasdaq has lost 70 points. The bond market is currently down 12/32 (3.17%), which should push this morning's mortgage rates higher by approximately .250 of a discount point over Thursday's early pricing.The Labor Department gave us October's Employment report early this morning, announcing the U.S. unemployment rate held at 3.7% and that a surprising 250,000 new payrolls were added to the economy last month. Analysts were expecting to see 190,000 new jobs, indicating strength in the employment sector. This has fueled this morning's bond selling. There was a downward revision in September's job number that fell short of forecasts when it was posted (134k to 118k). Unfortunately, traders are more concerned with current numbers than revisions.The third headline reading of the report that everyone was watching was average hourly earnings. It came in at up 0.2%, matching predictions. The annual rate of wage growth rose to 3.1%, its strongest rate since April 2009. That has inflation concerns on the rise, contributing to the early weakness in bonds.There was also a relatively minor piece of data posted late this morning. The Commerce Department released September's Factory Orders report that showed new orders rose 0.7% at U.S. factories during the month. This was a bit stronger than the 0.4% that was expected, making the data bad news for bonds and mortgage rates. However, it has had no influence on this morning's trading or mortgage pricing due to the importance of the earlier data.Next week has plenty scheduled that may influence mortgage rates but not a high number of reports. The economic data most likely to affect mortgage pricing will come late in the week. There are also two Treasury auctions set for mid-week and the second to last FOMC meeting of the year Thursday. And let's not forget the mid-term elections Tuesday. There is a very good possibility of seeing plenty of movement in the financial and mortgage markets. Look for details on next week's events 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...Float if my closing were taking place between 21 and 60 days...Float 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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