Friday, May 20th
Friday’s bond market has opened in negative territory with little to drive trading other than early stock gains. Stocks are looking to close the week on a positive note, pushing the Dow up 169 points and the Nasdaq up 94 points. The bond market is currently down 4/32 (2.85%), but a little strength late yesterday should allow this morning’s mortgage rates to be approximately .125 of a discount point lower than Thursday’s morning pricing.
4/32
Bonds
30 yr - 2.85%
169
Dow
31,422
94
NASDAQ
11,483
Trailing 90 Days - National Average
Medium
Unknown
Today doesn’t have anything scheduled that we need to be concerned about. It is not surprising that we are seeing bonds open in negative ground since stocks are up. This is a pattern that we will likely see over the next couple weeks. Stock gains generally cause bond prices to move lower, leading to higher yields and an upward move in rates. When traders are selling stocks, bonds are often the beneficiary as investors look for safety from the volatility. As funds come into the bond market, bond prices rise and mortgage rates improve.
Medium
Unknown
Don’t fall too complacent with this morning’s markets and mortgage pricing. There is a good chance of stocks reversing course or extending this morning’s gains before the end of the day. In other words, we may see an intraday revision to rates sometime today.
Medium
Unknown
Next week has several economic reports that are considered to be moderately to highly important for the markets to digest. Monday’s calendar is empty, meaning we can expect weekend headlines to drive trading (if there is any relevant news). The most important reports, including the FOMC minutes, come mid and late week. Look for details on all of the 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.