August 9th, 2008 11:32 PM by Lehel Szucs
Friday's bond market has opened down slightly following what appears to be another round of stock gains. The stock markets are well in positive territory with the Dow up 190 points and the Nasdaq up 38 points. The bond market is currently down 3/32, but we still should see an improvement of approximately .375 - .500 of a discount point in this morning's mortgage rates as a result of strength in bonds late yesterday.
Today's only economic data was the release of Employee Productivity and Costs for the second quarter. It showed an annual rate of 2.2%, falling short of analysts' forecasts of a 2.5% pace. However, this was close enough to expectations that the difference is not the cause of this morning's small bond losses. It is stock optimism that is restricting gains in bonds during early trading.
I would not be surprised to see additional movement in mortgage rates later today as investors settle their positions before the weekend. It has been a fairly volatile week in the markets and with the major stock indexes showing sizable gains again today it appears that we may see more volatility throughout the day.
There is some important economic data scheduled for release next week. We will get to see June's Consumer Price Index (CPI) that measures inflationary pressures at the producer level of the economy and retail level sales figures among other reports. However, the most important releases begin mid-week so I am expecting to see stock prices be a major influence on bonds the first part of the week. 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... Float 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.
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