December 12th, 2008 11:31 AM by Lehel Szucs
Friday's bond market has opened in positive following the release of mixed economic data and early stock market losses. The stock markets are well into negative ground with the Dow currently down 130 points and the Nasdaq down 5 points. The bond market is currently up 12/32, but we will still see an increase in this morning's rates of approximately .250 of a discount points due to weakness late yesterday.
This morning brought us the release of three relevant economic reports, two of which are considered to be highly important to the markets. The first was November's Retail Sales report that showed a 1.8% decline in retail level sales last month. This was a little stronger than the 2.0% drop that was expected, but is not enough of a difference to significantly affect mortgage rates.
The second piece of data was November's Producer Price Index (PPI) that also was close to forecasts but slightly favorable to bonds. This index measures inflationar y pressures at the producer level of the economy and showed a larger than expected drop of 2.2%. However, the core data reading that excludes prices for more volatile food and energy items matched forecasts of a 0.1% increase. Therefore, the data was pretty much a non-factor in today's pricing.
The last report of the day was the preliminary reading to the University of Michigan's Index of Consumer Sentiment. This index measures consumer willingness to spend and is considered moderately important. It showed a much higher level of sentiment than was expected with a reading of 59.1. Analysts were expecting it to come in at 55.0. But, since the stock markets are showing losses and today's key data didn't reveal any significant surprises, this index also has not heavily influenced today's trading or mortgage rates.
Next week is moderately busy with economic reports. There are a couple of relevant reports scheduled for release including the Consumer Pric e Index (CPI). However, the big news of the week may be the last FOMC meeting of the year on Tuesday. But look for 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... Lock if my closing was taking place between 21 and 60 days... Lock 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.
©Mortgage Commentary 2008