Morning Market Update

Thursday’s bond market has opened in negative territory, giving back some of yesterday’s afternoon gains. The stock markets are mixed again with the Dow down 27 points and the Nasdaq up 2 points.

The Labor Department announced early this morning that 309,000 new claims for unemployment benefits were filed last week. This was up from the revised total of 294,000 from the previous week but lower than the 340,000 that was expected for last week. However, the news hasn’t caused much movement in the markets or mortgage rates because the data is believed to be unreliable due to issues with California and Nevada’s figures. It appears they are still trying to work though some technical issues after updating computer systems that are used to report the weekly filings. The credibility of the numbers makes them unreliable and therefore, a non-factor in today’s trading.

August's Existing Home Sales report was released by the National Association of Realtors at 10:00 AM ET this morning. They announced that home resales rose 1.7% last month, exceeding analysts’ forecasts of a small decline in sales. The increase pushed sales to their highest level since February 2007, indicating housing sector strength that makes the data negative for the bond market and mortgage rates.

 

The Conference Board gave us the week’s final report late this morning also. They announced that their Leading Economic Indicators (LEI) for August rose 0.7%, slightly above the 0.6% that was expected. This means that the indictors are predicting a moderate rate of growth in the economy over the next several months. That means we should consider the data neutral to slightly negative for mortgage rates, although it is not considered to be a highly important report and has had a minimal impact on this morning’s trading.

There is nothing of relevance to mortgage rates set for release tomorrow. If the major stock indexes make a significant move up or down, bonds will likely move the opposite direction. On other words, sizable stock gains should equate to bond weakness in higher mortgage rates while stock losses could lead to a small improvement in mortgage pricing tomorrow. If stocks remain calm, bonds and mortgage rates will likely follow suit.

 

If you have not locked in your rate yet then I would suggest floating your rate because there is not much going on the rest of the week.