My New Blog

September 1st, 2011 3:15 PM
Rate Lock Advisory - Thursday Sep. 1st 



Thursday's bond market opened up slightly, but late this morning dropped well into negative ground after the release of today’s big economic data showed much stronger than expected results. However, bonds have steadily improved since then, actually recovering all of its earlier losses. The stock markets has shown a similarly opposing pattern with a negative open before spiking higher after the data was released. The Dow actually was up over 100 points just a little more than an hour ago, but those gains have evaporated. The Dow is currently down 8 points while the Nasdaq is nearly unchanged from yesterday’s close. The bond market is currently up 5/32, but due to weakness in trading late yesterday, we will likely see little change in this morning’s mortgage rates.

The first of this morning’s three releases was the revised 2nd Quarter Productivity numbers that showed worker productivity fell 0.7% last quarter. Analysts were expecting to see a 0.5% decline in today’s revision. This means workers were less productive per hour worked last quarter than many had thought, making the news negative for the bond market and mortgage rates. However, this particular release is considered to be only moderately important for the mortgage market, so its impact on this morning’s pricing has been minimal.

The Labor Department also gave us last week’s unemployment figures, announcing that 409,000 new claims for unemployment benefits were filed last week. This was close to the total that was expected, but an upward revision to the previous week’s number of claims makes the 409,000 a little short of forecasts. Still, since this data tracks only a single week of new claims, the small variance was not enough to influence mortgage rates.

Today’s big report came from the Institute for Supply Management (ISM), who said that their manufacturing index stood at 50.6 last month. This was a small decline from July’s 50.9, indicating manufacturer sentiment slipped slightly last month. That is basically good news for the bond and mortgage markets, but analysts were expecting to see a much bigger decline. This means that more surveyed manufacturers felt business conditions improved last month than those who said it had worsened, when analysts were expecting to see more say conditions had worsened. That indicates a stronger manufacturing sector than many had predicted, clearly meaning we should consider this bad news for the bond market. Fortunately though, the losses that followed were short-lived.

Tomorrow has even more important data scheduled for release. We will get the almighty monthly Employment report early tomorrow morning. This report is always a significant market mover if it shows any surprises. The Labor Department will give us August’s unemployment rate, number of new jobs added or lost during the month and average hourly earnings. The ideal scenario for the bond market and mortgage rates are rising unemployment, a drop in payrolls and earnings to fall slightly. Analysts are expecting to see that the unemployment rate remained at 9.1% and that 73,000 jobs were added during the month. Weaker then expected readings would signal further employment sector weakness and would be very good news for bonds and mortgage rates. However, if we get stronger than expected numbers, mortgage rates will probably spike higher tomorrow.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers. 
Posted by Anthony J. Hood on September 1st, 2011 3:15 PMPost a Comment (0)

Subscribe to this blog
Recent Posts:
Archive:
My Favorite Blogs:
Sites That Link to This Blog:


Equity Investment Capital 79405 Highway 111 Suite 9178 La Quinta, CA 92253
Phone: Toll Free Phone: Fax:

Staff Profiles | Contact Us | Your FICO score | Testimonials | FV Down Payment Assistance | Daily Mortgage News | Mortgage Market | Purchase Options | First Time Home Buyer | Refinance Options | Home | Mortgage Saving Tips | Site Map | Apply Now | Mortgage Calculators | Todays Rates | Customer Login | 9 Steps to Ownership | How to Sell Your Home | Disputing Credit Reports | Paying Your Loan Early | Homeowner Deductions | Reverse Mortgages | Home Price Index | Daily Rate Lock Advisory | My Blog | Win $1000 | LA, OC, Riverside | Sacramento Experts | San Diego Experts

Copyright © 2012 Equity Investment Capital
Portions Copyright © 2012 a la mode, inc.
Another XSite by a la mode, inc. | Admin Login| Terms of Use| Site Map



 
State:
County:
City:
Zip: