June 18th, 2008 9:34 AM by Lehel Szucs
Wednesday's bond market has opened in positive territory following early stock losses. The stock markets are reacting negatively during early trading to some corporate earnings news. This has the Dow down 131 points and the Nasdaq down 32 points. The bond market is currently up 20/32, which should improve this morning's mortgage rates by approximately .125 - .250 of a discount point.
There is no relevant economic news scheduled for release today, so I am expecting to see the stock markets and oil prices be the biggest influences on bond trading and mortgage rates. If the major stock indexes extend their early losses, we could see bond prices rise and mortgage rates move lower. However, if stocks recover, we will likely see bonds suffer and possibly get upward revisions to mortgage rates today.
May's Leading Economic Indicators (LEI) will be posted late tomorrow morning. The Conference Board, who is a New York-based business research group, will post this data. It attempts to predict economic activity over the next three to six months. If it shows rapidly rising levels of activity, bond prices will probably drop, pushing mortgage rates higher tomorrow morning. But, a weaker than expected reading could lead to lower mortgage pricing. It is expected to show no change from April to May.
We will also get last week's unemployment numbers from the Labor Department tomorrow morning. Normally these figures are not worth addressing too much, but the previous week's number of new claims jumped to 384,000, coming close to an important benchmark of 400,000. If last week's total moved higher, we may see bonds respond favorably. If the number of new claims was below forecasts of 375,000, bonds could move lower tomorrow. This data comes before the LEI and before the other markets open.
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.
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