October 2nd, 2020 1:38 PM by T. Fanning
Last Updated: 10/2/20Friday's bond market has opened in negative territory after showing solid gains during premarket trading. Stocks are showing sizable losses but are well off earlier lows. The Dow is currently down 161 points and the Nasdaq is down 82 points. Both indexes appeared as if they would open with much larger losses before rebounding. The bond market is currently down 6/32 (0.69%), but strength late yesterday should still allow this morning's mortgage rates to be slightly lower than Thursday's early pricing. If you saw an intraday improvement in rates yesterday, you likely will see an increase this morning.Before we tackle today's economic news, it is worth noting that today's market movement is definitely being fueled by overnight news that President Trump and the First Lady have both tested positive for the coronavirus. That was followed this morning by reports that the President is showing minor symptoms and is not asymptomatic. This is why stocks were expected to open with significant losses and bonds with gains. For some unknown reason, those premarket levels have evaporated, leaving stocks down but in much better shape while bonds have moved into negative ground late this morning. It wasn't this morning's key economic data as that snapshot held steady long after it was released. It will be interesting to see what happens throughout the day today. Don't be surprised to see some movement in the markets and possibly an intraday change to mortgage rates before closing.Today's big economic news was September's Employment report that gave us mixed results. It revealed that the U.S. unemployment rate fell to 7.9% last month from August's 8.4%. Forecasts were calling for 8.2%. The good news came in the payroll number that showed 661,000 new jobs were added back to the economy, falling well short of the 850,000 that was expected. Another bit of good news was the average earnings increase of 0.1% when expectations were a 0.2% rise. Overall, the report gives us both favorable and unfavorable data. That explains why the markets haven't moved too far from the pre-report levels.August's Factory Orders report was posted at 10:00 AM ET. The Commerce Department announced a 0.7% rise in new orders at U.S. factories for durable and non-durable goods. This was a smaller increase than was expected, hinting that the manufacturing sector was not as strong as thought. By theory that is good news for mortgage rates. However, this is only a moderately important report on a day with so much else going. This is why it had no impact on this morning's rates.The final report of the day was the University of Michigan's revised Index of Consumer Sentiment for September that came in at 80.4, up from the previous estimate of 79.0. The increase means more surveyed consumers felt good about their financial situations than earlier in the month. Rising confidence usually translates into stronger levels of consumer spending that fuels economic growth, making the data slightly negative for mortgage rates.Next week has very little in terms of relevant economic data scheduled for release. The biggest items showing are the minutes from the last FOMC meeting and a couple of Treasury auctions midweek. With the lack of data to drive trading, we can expect political and stock movement to have the heaviest influence on mortgage rates. There are a few speaking engagements from current Fed members that may come into play also. Look for details on 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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