April 6th, 2018 9:17 AM by T. Fanning
Last Updated: 4/6/18Friday's bond market has opened in positive territory following mixed employment data. Stocks are reacting negatively to the data and tariff-related concerns, pushing the Dow lower by 150 points while the Nasdaq is down 38 points. The bond market is currently up 9/32 (2.80%), which should improve this morning's mortgage rates by approximately .125 of a discount point.Today's major economic release was March's Employment report that showed only 103,000 new jobs were added to the economy last month, the fewest in the past six months. It also showed the unemployment rate held at 4.1%. Expectations were for 180,000 new payrolls and a 4.0% unemployment rate. February's payroll number was revised slightly higher but January's number was lowered, creating a net difference of 50,000 fewer jobs than previously thought over the first two months of the year.The bad news came in the average earnings reading that revealed a 0.3% rise in earnings. Most analysts were expecting to see a 0.2% or 0.3% increase, so the news wasn't much of a surprise. However, it is a pretty strong increase, fueling inflation concerns that make bonds less appealing to investors and allows the Fed to be more aggressive towards rate hikes. I believe we would have seen a stronger favorable response to the report if earnings came in softer than they did.Overall, the report is being taken as a positive in the bond market and slightly negative for stocks. It looked like it was going to be a negative morning for stocks long before the Employment report was posted. In fact, the major indexes were stronger at the open than what they appeared to be before the release. What is dragging stocks down this morning more than anything else is further concerns about tariffs and a potential trade war with China. Thus far, that has been a benefit for the bond market and mortgage rates.Fed Chairman Powell has a speaking engagement this afternoon that could affect the markets. He will be speaking in Chicago at 1:30 PM. Since the topic is the outlook of the economy, his words may influence the markets and mortgage rates if something unexpected is said.Next week has a mixed bag of events scheduled that have the potential to influence mortgage rates. There is nothing of relevance set for Monday, but the rest of the week will bring us several economic reports, including two important inflation readings, the minutes from the most recent FOMC meeting and a couple of Treasury auctions. Look for details on next week's events 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...Lock 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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