August 2nd, 2019 11:41 AM by T. Fanning
Last Updated: 8/2/19Friday's bond market has opened in positive territory as yesterday's surprise super rally carries into overnight and early morning trading. We did get some major economic readings today, but they don't seem to be driving this morning's gains. Stocks are extending yesterday's selling, pushing the Dow down another 211 points and the Nasdaq down 109 points. The bond market is currently up 11/32 (1.86%), which with yesterday's late move should cause this morning's mortgage rates to be approximately .375 of a discount point lower than Thursday's morning pricing. There were widespread intraday rate improvements yesterday afternoon, so the size of this morning's improvement depends on how much of a revision you saw yesterday.The first of this morning's three economic reports was July's Employment report at 8:30 AM ET. It revealed that the unemployment rate held at 3.7% while 164,000 new jobs were added to the economy. Those were mixed readings for bonds and mortgage rates with the unemployment rate being a positive since it was expected to move down to 3.6%. The payroll number was a bit higher than forecasts, making it the bad news. However, it wasn't a significant variance and downward revisions to June and May's numbers that removed 41,000 jobs from previous estimates helped offset the higher July number.Average hourly earnings was the third headline number. It showed an increase of 0.3% in earnings, which nearly matched expectations. Forecasts were split between a 0.2% and a 0.3% rise. In some ways, the earnings news is more important to the bond market than the payroll number or unemployment rate. This is because it is more directly related to inflationary pressures that make bonds less appealing to investors.The Commerce Department gave us June's Factory Orders report at 10:00 AM ET. They announced a 0.6% increase in new orders for durable and non-durable goods. This was weaker than the 0.8% that was forecasted, indicating that a measure of manufacturing strength was not as strong as many had thought. The softer reading makes the data good news for mortgage rates, but the truth is that it has not had an impact on this morning's trading.Also posted late this morning was July's revised University of Michigan Index of Consumer Sentiment. It stood at 98.4, nearly unchanged from the preliminary reading of 98.2. This index helps us track consumer willingness to spend and is considered to be only moderately important. Since it did not show a spike in confidence like Tuesday's similar Consumer Confidence Index did, we can consider the news favorable. But as expected, the Employment report was the focus of today's economic data.Next week is nowhere near as busy as this week was nor should it have close to the same volatility as we saw the past few days. There is little scheduled economic data that we expect to directly affect mortgage rates. Although, there are two important Treasury auctions mid-week. 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...Lock 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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