Friday, September 5th
Friday’s bond market has opened well in positive territory after favorable economic data was posted. Stocks are reacting negatively to the same news, pushing the Dow down 336 points and the Nasdaq down 78 points. The bond market is currently up 21/32 (4.07%), which should improve this morning’s mortgage rates by approximately .500 of a discount point if compared to Thursday’s early pricing.
21/32
Bonds
30 yr - 4.07%
336
Dow
45,285
78
NASDAQ
21,629
Trailing 90 Days - National Average
High
Positive
This morning’s big news was the release of August’s governmental Employment report at 8:30 AM ET. It revealed the U.S. unemployment rate rose from 4.2% to 4.3% last month, matching expectations but touching its highest level since late 2021 . The economy added only 22,000 new jobs during the month, falling short of the 78,000 payroll number that was predicted. Average hourly earnings also showed no surprise with a 0.3% increase last month. On an annual basis, earnings slowed from July’s rate of 3.9% to 3.7% in August.
Medium
Positive
The report certainly supports the theory that the employment sector is slowing. It isn’t in a freefall, but there are several areas of concern. This makes the data good news for bonds and mortgage rates and also cements the likelihood of the Fed making at least a quarter-point cut to key short-term interest rates at this month’s FOMC meeting. Today’s release also raises the possibility of seeing more than one rate cut over the remaining three meetings this year. As expected, bonds are responding with a nice rally and a noticeable improvement to rates.
High
Unknown
Next week doesn’t have a large number of economic reports scheduled, but a good portion of what is coming is extremely important to the financial and mortgage markets. Of particular interest are two key inflation indexes Wednesday and Thursday that could help decide what the Fed will do during the following week’s FOMC meeting. In addition to the data, there are also a couple of long-term Treasury auctions that have the potential to affect rates during afternoon trading midweek. It starts light with nothing of importance set for Monday or Tuesday, not even a Fed speech since they are in their mandatory two-week pre-FOMC meeting quiet period. 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... 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.