Friday, June 13th
Friday’s bond market has opened in negative territory after this morning’s unexpectedly strong economic data erased overnight gains that were fueled by geopolitical events. Stocks are showing sizable losses with the Dow down 588 points and the Nasdaq down 175 points. The bond market is currently down 7/32 (4.39%), which should cause a slight increase in this morning’s mortgage pricing.
7/32
Bonds
30 yr - 4.39%
588
Dow
42,378
175
NASDAQ
19,487
Trailing 90 Days - National Average
Low
Positive
Another successful Treasury auction led to modest bond gains yesterday afternoon. The 1:00 PM ET results announcement of the 30-year Bond sale indicated a decent interest in the securities compared to other recent sales. We didn’t get a strong enough of a move to have an impact on mortgage pricing, but the fact investors still have an appetite for long-term debt is a technical win for mortgage rates.
Medium
Negative
This morning’s sole relevant economic report was June’s preliminary Index of Consumer Sentiment reading from the University of Michigan. They announced a reading of 60.5 that was surprisingly higher than the 53.5 that was expected and May’s 52.2. The jump in the reading means surveyed consumers felt much better about their own financial situations than they did last month. This is bad news for bonds and mortgage rates because more confident consumers are likely to make large purchases in the immediate future, fueling economic growth. Consumer spending makes up over two-thirds of the U.S. economy.
Medium
Positive
In other news, Israel’s overnight attack on Iran is affecting the global markets. It significantly raises the possibility of a regional war that would cause havoc with the markets, particularly oil prices. We are seeing the news negatively affect stocks this morning, but aren’t seeing the standard flight to safety that usually shifts funds into the bond market. Nearly everyone is expecting Iran to retaliate soon. How this conflict proceeds will likely become more clear over the weekend.
High
Unknown
Next week brings us plenty for the markets to digest. It will start with weekend headlines from the Middle East driving early trading before we get the results of another Treasury auction Monday afternoon. There is a key consumer spending report and a couple of moderately relevant economic releases Tuesday and Wednesday morning ahead of another FOMC meeting results and projections Wednesday afternoon. The financial markets will be closed Thursday for the Juneteenth holiday. Look for details on all of next week’s activities in Sunday evening’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.