How I See The Market

Monday’s bond market has opened in positive territory with the stocks mixed. The Dow is currently down 24 points while the Nasdaq has gained 5 points. The bond market is currently up 6/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point from Friday’s morning pricing.

Complicating the financial markets today are the demonstrations in Barhain and Iran.  Especially concerning are the demonstrations in Iran.  It is feared that the Iranian leadership will use blunt force and bullets to quell the demonstrations.  If that happens we will probably see great fluctuations among the various markets until some sort of resolution takes place.

There is no relevant economic data scheduled for release today, so look for the stock markets to be the biggest influence on bond trading and mortgage rates. The rest of the week brings us the release of six economic reports worth watching in addition to the minutes from the last FOMC meeting and two speaking appearances from Fed Chairman Bernanke.

The week’s first release is one of the highly important ones when the Commerce Department posts January’s Retail Sales data early tomorrow morning. This report is very important to the financial markets because it measures consumer spending. Since consumer spendi ng makes up two-thirds of the U.S. economy, any related data is watched quite closely. If tomorrow's report reveals weaker than expected sales, the bond market should thrive and mortgage rates will fall since it would be a sign that the economy is not as strong as many had thought. However, a stronger reading than the 0.5% increase that is expected could lead to higher mortgage rates.

Overall, the most important day of the week will likely be Thursday with the CPI being released, but tomorrow and Wednesday will also be active days for mortgage rates due to the importance of the Retail Sales data and the number of events scheduled Wednesday. In other words, be prepared for an active week in the markets and mortgage rates, particularly the middle part of the week.

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 cl osing 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.