August 24th, 2018 1:41 PM by T. Fanning
Last Updated: 8/24/18Friday's bond market has opened flat despite favorable economic data. Stocks appear to want to close the week on a positive note with the Dow up 85 points and the Nasdaq up 49 points. The bond market is currently down 1/32 (2.82%), which should keep this morning's mortgage rates at Thursday's morning levels.The Commerce Department gave us July's Durable Goods Orders at 8:30 AM ET this morning. They announced a 1.7% decline in new orders for big-ticket products when analysts were expecting to see only a 0.6% decline. That indicated the manufacturing sector was a bit softer than many had thought. The size of the decrease isn't nearly as relevant as it would be in other reports because this data is known to be extremely volatile. That said, a secondary reading that excludes the more volatile transportation orders, such as new airplanes, rose 0.2%. Forecasts were calling for a 0.4% rise in that reading. There is no doubt that this is a favorable report for the bond market and mortgage rates. However, because of the known volatility, it isn't causing as much of a reaction in the markets as other reports would.This morning's Jackson Hole conference speech by Fed Chairman Powell gave us some interesting tidbits. He states that there is no reason to believe the economy will slow in the near future, but while inflation has risen close to their preferred annual pace of 2.00%, they don't believe it will continue to rise or overheat. Those inflation comments are good news for bonds and mortgage rates. His speech was generally positive about the economy, though inflation friendly. Economic growth isn't necessarily a concern for the bond market. It is the conditions that traditionally accompany economic growth that are concerning, such as rising inflation. Because rising inflation makes a bond's future fixed interest payments less appealing to investors, they tend to suffer when inflation is gaining steam. Today's speech should alleviate some concerns investors had.Next week has a small handful of economic reports scheduled, although none are considered to be key releases or potential market-movers. There are also a couple of Treasury auctions that may come into play. Each day as something set that we will be watching except Monday. That leaves weekend news or a big move in stocks to likely drive bond trading and mortgage rates as the new week starts. 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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