March 8th, 2019 11:12 AM by T. Fanning
Last Updated: 3/8/19Friday's bond market has opened fairly flat following mixed results in today's highly important economic report. During early morning trading it looked as if it was going to be a positive day for rates, but after the data was posted they slipped back to nearly unchanged from Thursday's close. Stocks are looking to close the week on a negative note with the Dow down 140 points and the Nasdaq down 69 points. The bond market is currently up 1/32 (2.63%), which with gains late yesterday should improve this morning's mortgage rates by approximately .125 of a discount point.February's Employment report was today's major news. It showed that the unemployment rate fell 0.2% to 3.8% last month as expected. The surprise came in the low payroll number of only 20,000 new jobs. This was much lower than the 176,000 that was expected. In fact, it is so far off that many analysts are questioning the accuracy and are predicting a sizable upward revision next month. We will have to wait until April 5th to see if today's headline number was indeed correct. There were minor upward adjustments to January and December's payroll number, but not enough the be a factor in today's trading.The bad news for bonds was the 0.4% jump in average earnings. Analysts were expecting to see only a 0.3% rise in earnings. The 0.1% difference may not seem like a lot, but for this type of data it is big news. Higher earnings are a sign of wage inflation that can easily spread to other parts of the economy, making bonds less appealing to investors and allows the Fed to be more aggressive with key rate hikes. Overall, it is safe to call today's news mixed. Unfortunately, traders are now focusing in on the earnings reading since the payroll number is believed to not be accurate.Also posted early this morning was January's Housing Starts that came in much stronger than predictions. It revealed that new home groundbreakings spiked 18.6% as the new year started. A downward revision to December's starts is inflating the percentage change, but this is still a sign that the new home portion of the housing sector was quite strong. Fortunately, this is considered to be only a moderately important report, limiting its impact on today's mortgage pricing.Next week looks to be another active week for mortgage rates. It starts off with the highly important Retail Sales report Monday morning followed by two important inflation indexes Tuesday and Wednesday. Throw in Durable Goods Orders Wednesday also, you then have a very busy and potentially volatile first half of the week. Look for details on all of next week's mortgage-relevant 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...Float 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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