November 13th, 2009 8:54 AM by Lehel S.
Friday's bond market has opened flat following favorable consumer confidence news but early stock gains. The stock markets are looking to close the week in an upward move with the Dow up 78 points and the Nasdaq up 12 points. The bond market is nearly unchanged, but we should see an improvement in this morning's mortgage rates of approximately .250 of a discount point due to strength late yesterday.
September's Goods and Services Trade Balance report was posted this morning, giving us the size of the U.S. trade deficit. It revealed a deficit of $36.5 billion that exceeded forecasts by a wide margin. Fortunately for mortgage rates this data is not considered to be highly important to the markets.
The second report of the day was the University of Michigan's Index of Consumer Sentiment for November. It came in with a reading of 66.0, falling well short of analysts' expectations. This was good news for bonds because it indicated that consumers were much less optimistic about their own financial situations than many had thought. That means they are less likely to make large purchases in the near future, limiting fuel for economic growth.
Yesterday's 30-year Treasury Bond auction drew a lackluster interest from investors. Many of the readings used to measure investor demand fell short of recent sales. This means that investors are leery of purchasing long-term debt from the U.S., but mortgage-related bonds faired well despite the news. This led to many lenders revising rates lower late yesterday or this morning.
Next week is much more active in terms of economic releases than this week was. We do have important data being posted Monday morning when the Commerce Department will release October's Retail Sales data. This is a very important release because it gives us a measurement of consumer spending. Since consumer level spending makes up two-thirds of the U.S. economy, any related news is w atched closely.
The rest of the week gives us additional important reports such as the two key inflation indexes. Look for more details on those and the rest of 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... 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.