FRIDAY,  JAN 10th, 2025

Friday’s bond market has opened well in negative territory following clearly unfavorable employment news. Stocks are in heavy selling mode also with the Dow down 571 points and the Nasdaq down 405 points. The bond market is currently down 19/32 (4.75%), pushing the 10-year yield to its highest level since November 2023. This should cause an increase in this morning’s mortgage rates of approximately .625 – .750 of a discount point.

Today’s big news was the release of December’s Employment report that indicated the employment sector was much stronger than expected last month. It revealed a 4.1% unemployment rate, down from November’s 4.2%. There were 256,000 new jobs added to the economy, greatly exceeding the 155,000 that was expected by analysts. If there was any good news in the report, it would have to be the average earnings readings. December earnings met expectations of up 0.3%, but year-over-year the 3.9% rate was slightly below predictions of 4.0%. Unfortunately for mortgage rates the payroll and unemployment rate headlines are drawing the most attention.

Also posted this morning was January’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment at 10:00 AM ET. It actually gave us a reading that was good news for bonds and mortgage rates. They announced a 73.2 reading that was softer than December’s 74.0 and lower than forecasts. The decline means surveyed consumers are a bit more pessimistic about their own financial situations than they were last month. Because waning confidence usually translates into weaker consumer spending numbers, we can label the data good news. However, this report is taking little attention away from the unfavorable blowout Employment report that is dominating the markets this morning.

Next week has several highly important economic releases, including two key inflation indexes and a consumer spending report. They are set for the middle days with Monday and Friday having little scheduled. There is also some moderately important data and a few Fed speeches to go along with those influential reports. Furthermore, we are heading into corporate earnings season that may indirectly affect bonds through stock gains or losses. 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…

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