January 21st, 2010 3:58 PM by Lehel S.
Thursday's bond market has opened in negative territory following mixed economic data and a mixed open in stocks. The major stock indexes are moving in opposite directions this morning with the Dow currently down 28 points and the Nasdaq up 10 points. The bond market is currently down 5/32, but we will likely still see a slight improvement in this morning's mortgage rates due to strength late yesterday.
The Labor Department reported this morning that 482,000 new claims for unemployment benefits were filed last week. This was much higher than the 440,000 that was expected and hints that further weakness in the employment sector may be ahead. However, this was only a single week's worth of data so look for next Thursday's numbers to be watched closely. Unfortunately for bonds and mortgage shoppers, this data does not usually have a lot of influence on the markets because it covers such a sort time frame. But the surprising jump did garner some attention in the markets, making next week's release more important.
The Conference Board, who is a New York-based business research group, posted December's Leading Economic Indicators (LEI) late this morning. They reported a surprising 1.1% jump, well over the 0.7% increase that was expected. This means that they are predicting a rapid increase in economic activity over the next three to six months. While that is more of a prediction than factual results, if it is an accurate forecast it would not bode well for bonds and mortgage rates in the near future.
There is no relevant economic data tomorrow, so look for the stock markets to be the biggest influence on bond trading and mortgage rates. I suspect it may be a fairly quiet day for rates unless something drastic happens to stocks or unexpected news comes out.
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.