September 2nd, 2016 10:49 AM by T. Fanning
Last Updated: 9/2/16Friday's bond market opened in negative territory even though today's employment data showed weaker than expected results. The stock markets are reacting to the same data with sizable gains, pushing the Dow higher by 95 points and the Nasdaq up 29 points. The bond market is currently down 13/32 (1.61%), but preventing an increase in this morning's mortgage rates is strength late yesterday. If your lender did improve rates intraday yesterday, then you should see an increase in this morning's pricing by the same amount.Today's major economic news was August's Employment report from the Labor Department at 8:30 AM ET. The headline numbers were 151,000 new jobs, a 4.9% unemployment rate and a 0.1% increase in average earnings. The payroll number was softer than the 180,000 that was expected as was the earnings increase that was predicted to rise 0.2%. The unemployment rate was forecasted to slip 0.1% to 4.8% but remained unchanged from July's level. All three readings are favorable for bonds and mortgage rates, although it does not appear that way considering this morning's losses. Apparently traders wanted to see even weaker numbers.Also posted this morning was July's Factory Orders data. The Commerce Department said at 10:00 AM ET that new orders for durable and non-durable goods rose 1.9% in July, nearly matching forecasts of 2.0%. A good portion of this data was posted in last week's Durable Goods Orders report, so today's version doesn't carry too much significance. This is particularly true when it follows key data such as the Employment report.Overall, the employment data we saw today is actually good news for bonds while the manufacturing report is neutral to slightly negative. Besides the news that the employment sector was weaker than thought, the data also makes it less likely that the Fed will make a rate hike happen at its September meeting. Historically, the Fed avoids making monetary policy moves near a Presidential election (November FOMC meeting), so most analysts now think the rate hike will come at December's meeting at the earliest.Next week does not have much scheduled in terms of economic data or other events that may influence mortgage rates. The financial and mortgage markets will be closed Monday in observance of the Labor Day holiday and will reopen Tuesday for regular trading. There is no early close today in the bond or stock markets ahead of the holiday. 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...Lock if my closing were taking place between 21 and 60 days...Lock 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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