Friday, November 14th
Friday’s bond market has opened flat despite another round of stock selling. The major stock indexes are posting sizable losses of 424 points in the Dow and 134 points in the Nasdaq. The bond market is currently unchanged from Thursday’s close (4.11%), but weakness late yesterday is going to cause an increase of approximately .125 of a discount point in this morning’s mortgage rates.
0/32
Bonds
30 yr - 4.11%
424
Dow
47,032
124
NASDAQ
22,745
Trailing 90 Days - National Average
Medium
Negative
Yesterday’s 30-year Treasury Bond auction was met with similar demand as Wednesday’s 10-year Note sale did. The benchmarks pointed to a below-average interest in the securities compared to other recent sales, meaning investor appetite for long-term debt may be waning. We consider this bad news for mortgage rates because they are based on long-term mortgage bonds that need investor purchases to keep rates from moving higher. We did see bonds extend their morning losses after results were announced at 1:00 PM ET, leading to some lenders issuing an intraday increase to rates.
Low
Unknown
There is no relevant economic data expected to be released today, leaving us just a couple of Fed speeches and possibly stock selling to drive bond trading as the week comes to a close. We have not seen a new release schedule yet for any of the delayed economic reports that the markets usually rely on. Market analysts are hoping to get September’s Employment report in the immediate future because it is thought to have been prepared but not released before the government shutdown started in early October.
Medium
Unknown
Next week looks to be busy even if we don’t get any of the delayed reports. It starts with two Fed speeches Monday morning that show topics related to economic outlook and monetary policy. Fed Vice Chair Jefferson will be speaking in Kansas City at 9:30 AM ET and Governor Waller is set to speak in London at 3:35 PM ET. Both of these speeches will draw attention and could affect bond trading.
Medium
Unknown
Other scheduled activities include the release of the minutes from last month’s FOMC meeting, another long-term Treasury auction and a couple of economic releases from non-governmental agencies (Existing Home Sales and University of Michigan Index of Consumer Sentiment). Next week’s schedule is a little fluid at this time because there may be a release or two added since the government staff have returned to work. Look for details on all of next week’s calendar 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... Lock 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.