May 15th, 2020 3:19 PM by T. Fanning
Last Updated: 5/15/20Friday's bond market has opened in negative territory following mixed economic news. The major stock indexes are showing losses of 101 points in the Dow and 46 points in the Nasdaq. The bond market is currently down 4/32 (0.62%), which should keep this morning's mortgage rates close to Thursday's early pricing.This morning's big economic news was the release of April's Retail Sales data at 8:30 AM ET. It showed that consumer level spending fell a whopping 16.4% last month, weaker than forecasts of an 11.5% decline. This was the largest monthly drop on record following March's revised 8.3% decline and shows that the pandemic impact on the economy is worse than many had thought. Even a secondary reading that excludes more volatile and costly auto sales plunged 17.2% when it was expected to fall 8.6%. Because consumer spending makes up over two-thirds of the U.S. economy and they show weak activity, these results are clearly good news for mortgage rates.April's Industrial Production report was posted at 9:15 AM ET, revealing an 11.2% decline in output at U.S. factories, mines and utilities. While the sizable decline indicates weakness in the manufacturing sector, the size of it was close to forecasts. Therefore, we have not seen much of a reaction to the data this morning.May's preliminary reading of the University of Michigan's Index of Consumer Sentiment was also released this morning. It came in at 73.7, up from April's 71.8 when it was expected to fall to 67.0. The increase means that surveyed consumers were much more optimistic about their own financial situations this month than last month, contradicting forecasts. It was surprising to see an increase in sentiment considering the current employment situation. Still, the higher reading is bad news for bonds and mortgage rates because rising confidence means consumers are more likely to spend in the near future, fueling economic activity.Next week has only a couple of economic reports for the markets to digest. Most of which is related to the housing sector. However, it will also bring us the minutes from the most recent FOMC meeting and congressional testimony from Fed Chairman Powell. Monday has nothing of importance scheduled that we need to be concerned with. Look for details on all of next week's activities in the 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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