Sample Commentary Report




Monday’s bond market has opened in negative territory despite early losses in stocks. The major stock indexes are showing sizable losses, pushing the Dow down 123 points while the Nasdaq has lost 77 points. The bond market is currently down 12/32 (1.91%), which should cause this morning’s mortgage rates to be slightly higher than Friday’s early pricing.

There is nothing of importance being released today that is expected to affect mortgage rates. News that phase one of the China trade deal will be signed this weekend and weakness in bonds overseas that is spilling into U.S. Treasuries are causing this morning’s losses. Lighter than normal trading volume may also be contributing to the noticeable move in bonds. This can be expected around the holidays and likely will be a factor until next week.

The rest of this holiday-shortened week brings us the release of only two monthly economic reports that are relevant to the bond market and mortgage rates but one of them is considered to be very important. In addition to the data, we also will get the minutes from this month’s FOMC meeting. The more important of the two economic reports and the FOMC minutes won’t be released until late in the week.

Tomorrow will begin the week’s activities when the Conference Board posts their Consumer Confidence Index (CCI) for December at 10:00 AM ET. This is a moderately important release because it measures consumer willingness to spend. If consumers are more confident about their personal financial and employment situations, they are more apt to make a large purchase in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched closely by market participants and can affect mortgage rate direction. Current forecasts are calling for a rise in confidence from November’s reading of 125.5. Analysts are expecting tomorrow’s release to show a reading of 128.0, meaning consumers felt more optimistic about their own financial situation than they did in November. The lower the reading, the better the news it is for bonds and mortgage pricing.

Also worth noting is the holiday trading schedule. The stock markets will be open for a full day of trading tomorrow, but the bond market will close at 2:00 PM ET. All markets will be closed Wednesday for the New Year’s holiday and will reopen for regular hours Thursday. Unlike last week though, we do have a couple of important events taking place after the holiday. That means more traders will be working than we saw after the Christmas holiday, which should translate into more volume in the markets towards the end of the week.

Overall, Friday is the most important day of the week with the ISM manufacturing index and FOMC minutes being released. The calmest day for rates may be Thursday unless something unexpected happens. As we get past the holidays and the thin trading volume they bring, we will be able to put more faith in bond market moves. Until then, any noticeable move in bonds or mortgage rates will be suspect and likely not a sign of a trend upward or downward.

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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