January 9th, 2009 10:22 AM by Lehel Szucs
Friday's bond market has opened down slightly despite stock weakness and news of a spike in the unemployment rate last month. The stock markets are reacting negatively to the employment data with the Dow down 109 points and the Nasdaq down 37 points. The bond market is currently down 4/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point.
The Labor Department gave us December's Employment report this morning, showing an unemployment rate of 7.2% last month. This was higher than the 7.0% that was expected and its highest level since January 1993. They also reported that 524,000 jobs were lost during the month. That reading practically matched forecasts, however, today's release also revised November's job loss from 533,000 to 584,000. Overall, we saw 2.6 million jobs lost last year, which was the most since 1945.
Both of those readings are generally favorable to bonds, but traders don't seem to be in a buying mood. The average earnings reading of the report showed a 0.3% rise compared to the 0.2% that was expected. This could be negatively influencing trading to some degree, but it is my belief that a general lack of interest in bonds is more the culprit in today's flat trading than anything else. If not, today's headline numbers should have fueled a bond rally.
Next week brings us the release of several important reports including December's Retail Sales data and two key inflation readings. There is no relevant data scheduled to be posted Monday or Tuesday, but every other day of the week has important releases scheduled. Look for more details on next week's events in Sunday's weekly preview.
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... Floa t 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.
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