Rate Lock Advisory

Tuesday, November 4th

Tuesday’s bond market has opened in positive territory, following suit of overseas markets. Stocks are likely contributing to this morning’s early bond gains with little else to influence trading. The Dow is down 123 points while the Nasdaq is down 209 points. The bond market is currently up 4/32 (4.09%), which should keep this morning’s mortgage rates close to Monday’s early pricing.

4/32

Bonds

30 yr - 4.09%

123

Dow

47,213

209

NASDAQ

23,625

Mortgage Rate Trend

Trailing 90 Days - National Average

  • 30 Year Fixed
  • 15 Year Fixed
  • 5/1 ARM

Indexes Affecting Rate Lock

Low

Positive

General Bond Trends

There is no relevant economic data set for release today. Bonds were posting gains in most overseas markets during overnight trading while stocks were showing losses in the same markets. This morning’s stock losses and bond gains are likely just an extension of the global tone from overnight.

Medium

Neutral

Fed Talk

Yesterday afternoon’s speech by Fed Governor Cook didn’t give us any big surprises. The most noteworthy comment is that she is open to further cuts, but her decision would depend on the risks to the employment sector and where inflation is. That’s a pretty common and neutral stance, especially since there may not be much more data for them to consider before the December FOMC meeting. September’s Consumer Price Index (CPI) was released because it was needed for the Cost of Living Adjustment for social security payments. President Trump’s administration has previously stated that was an exception that would not be repeated if the government was still shut down. Therefore, just what data the Fed will have to make a decision is unclear.

High

Unknown

ADP Employment

Tomorrow has two economic reports set for release that are not affected by the government shutdown. The first will be the ADP private-sector employment report at 8:15 AM. The release is expected to show 26,000 new non-governmental jobs were added to the economy in October after a decline of 32,000 in September. The shutdown has prevented the release of both September and October’s Employment report from the government, meaning this version will take on more importance than it usually does. Good news for the bond market and mortgage rates would be another decline in payrolls, indicating weakness in the employment sector.

Medium

Unknown

ISM Service Index

The Institute for Supply Management (ISM) will release their non-manufacturing index (aka service index) at 10:00 AM ET tomorrow. This is the sister report of yesterday’s ISM manufacturing index with this version tracking business executive opinions on conditions in the service sector rather than manufacturing. It is expected to show a reading of 50.9 for October, up from September's 50.0 to signal stronger activity in the sector. Bad news for rates would be a larger increase since it would be a sign of economic strength.

Float / Lock Recommendation

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... Lock if my closing was taking place between 21 and 60 days... Lock 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.

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