Friday, January 16th
Friday’s bond market has opened in negative territory following stronger than expected economic news. Stocks are showing minor losses of 56 points in the Dow and 4 points in the Nasdaq. The bond market is currently down 3/32 (4.18%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point.
3/32
Bonds
30 yr - 4.18%
56
Dow
49,385
4
NASDAQ
23,525
Trailing 90 Days - National Average
Medium
Negative
December’s Industrial Production report was released at 9:15 AM ET this morning. It revealed output at U.S. factories, mines and utilities rose 0.4% last month, exceeding forecasts of up 0.2%. While the larger than expected increase is a sign of manufacturing sector strength, this report doesn’t carry a high level of importance in the markets. If this morning’s bond weakness is a result of the data, it is likely because there are few other headlines to drive trading this morning.
Medium
Unknown
We also have two Fed-member speeches today that could draw a reaction in the markets. Vice Chair for Supervision Michelle Bowman will be speaking at 11:00 AM ET at an economic conference in Massachusetts. That will be followed by a 3:30 PM speech by Vice Chair Philip Jefferson at a different conference in Florida. Both speeches have topics related to the outlook of the economy and monetary policy. We aren’t expecting them to yield a big surprise that will cause a noticeable move in the markets, but we could see a reaction to something said that could alter mortgage rates slightly.
High
Unknown
Next week begins with the markets closed on Monday for the Dr. Martin Luther King Jr holiday. The rest of the week is light in the number of reports and other events scheduled that may influence mortgage rates, but one of those few releases includes the Fed’s preferred inflation readings. It is more important to the bond market and mortgage rates than any of the other economic reports and the sole Treasury auction that we will get next 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 was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.