June 29th, 2018 12:39 PM by T. Fanning
Last Updated: 6/29/18Friday's bond market has opened down slightly with stocks in rally mode to close out the week. The major stock indexes are showing sizable gains, pushing the Dow higher by 241 points and the Nasdaq up 53 points. The bond market is currently down 2/32 (2.84%), which should keep this morning's mortgage rates at Thursday's early levels.Yesterday's 7-year Treasury Note auction ended up being a non-factor in the bond market. Demand for the securities was average at best and had no impact on trading or mortgage rates during afternoon trading.May's Personal Income and Outlays data was today's first economic release. The Commerce Department announced a 0.4% increase in income and a 0.2% rise in spending. Analysts were expecting to see a 0.4% increase in both readings. The weaker spending reading is good news for bonds and mortgage rates because consumer spending makes up over two-thirds of the U.S. economy. Therefore, spending levels that fall short of expectations mean overall economic growth may run below forecasts. Generally speaking, what is good for the economy is good for stocks and bad for bonds and mortgage rates.The final report of the week came from the University of Michigan at 10:00 AM ET when they revised their Index of Consumer Sentiment for June. It came in at 98.2, down from the preliminary reading of 99.3. Forecasts were calling for a reading of 99.0, indicating surveyed consumers did not feel as good about their own financial and employment situations as previously thought. Because weaker levels of sentiment usually mean consumers are less likely to make a large purchase in the immediate future, we can consider this good news for the bond and mortgage markets. However, this is only a moderately important piece of data, limiting its impact on today's mortgage pricing. What favorable impact we did get is helping to prevent more of a negative reaction to this morning's stock rally.Next week is going to be interesting. It is a holiday-shortened week due to Independence Day Wednesday and an early close Tuesday ahead of it. In addition to the holiday, we also have a decent sized batch of economic releases that includes two major reports. One of them comes Monday when June's ISM manufacturing index will be posted at 10:00 AM ET. Look for details on all of next 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...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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