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Lake Tahoe Home Loans and Lake Tahoe Mortgage Loans – December 19, 2013

Lake Tahoe Home Loans, Lake Tahoe Home Loan Rates, Lake Tahoe Mortgage Loans, Lake Tahoe Mortgage Loan Rates, and Lake Tahoe Mortgage Rates:

Thursday’s bond market has opened in negative territory again as yesterday afternoon’s Fed events continues to affect this morning’s trading. The stock markets are giving back just a little of yesterday’s Fed-fueled gains with the Dow down 24 points and the Nasdaq down 12 points. The bond market is currently down 13/32 (2.93%), which will push this morning’s mortgage rates higher. After we updated this report yesterday afternoon, the bond and mortgage markets weakened just before close, causing some lenders to revise rates higher. How much of an increase in this morning’s pricing will depend if your lender revised higher late in the day and how much of a revision was made. Overall, this morning’s rates should be approximately .375 – .500 of a discount point higher than Wednesday’s morning pricing.

There were three pieces of economic data posted this morning, but none were considered highly important to the markets or labeled as key data. The first came at 8:30 AM ET when the Labor Department posted last week’s unemployment figures. They announced that 379,000 new claims for unemployment benefits were filed last week. This was moderately higher than the revised 369,000 of the previous week. However, analysts were expecting to see a sizable decline in initial claims last week, not an increase. That indicates the employment sector was weaker last week than many had thought, making the data good news for the bond market and mortgage rates. Unfortunately, this is just a weekly report and traders are still reacting to yesterday’s news. Therefore, this data has not had much of an impact on this morning’s mortgage rates.

The National Association of Realtors gave us November’s Existing Home Sales report at 10:00 AM ET. They announced that sales of previously owned homes fell 4.3% last month, nearly doubling the decline that was expected. It was the third consecutive monthly decline and the lowest level since December of last year, pointing towards a softening housing sector. That is also good news for the bond and mortgage markets, but not good enough to offset this morning’s early selling.

Today’s third and final economic report was November’s Leading Economic Indicators (LEI) from the Conference Board at 10:00 AM. It showed a 0.8% increase in the indicators, meaning it is predicting a moderate rate of economic growth over the next several months. Forecasts were calling for a 0.6% increase. Fortunately, this data falls into the same situation as this morning’s other reports. It isn’t important enough to draw focus away from the Fed’s tapering decision yesterday.

We also have the 7-year Treasury Note auction to watch later today. Results of the sale will be posted at 1:00 PM ET, so any reaction to it will come during early afternoon trading. Yesterday’s 5-year Note sale did not go well at all, so we don’t have much to be optimistic about in today’s auction. Generally speaking, a strong level of investor demand could help boost bond prices and possibly lead to a small improvement in mortgage rates. However, another weak level of interest could cause this morning’s bond losses to be extended and a potential upward revision to rates would exist.

Tomorrow has one relevant economic report scheduled for release. It is the second and final revision to the 3rd Quarter Gross Domestic Product (GDP) at 8:30 AM ET. I don’t think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month’s first revision showed that the economy expanded at a 3.6% annual pace during the quarter and this month’s final revision is expected to show no change from that level. A revision higher than the 3.6% rate that is expected would be considered bad news for bonds. But since this data is quite aged at this point and 4th quarter numbers will be posted next month, I don’t think it will have much of an impact on mortgage rates.

Lake Tahoe Home Loans and Lake Tahoe Mortgage Loan Rates – December 19, 2013 (Afternoon)

Lake Tahoe Home Loans, Lake Tahoe Home Loan Rates, Lake Tahoe Mortgage Loans, Lake Tahoe Mortgage Loan Rates, and Lake Tahoe Mortgage Rates:

WEDNESDAY AFTERNOON UPDATE: This week’s FOMC meeting has adjourned with no changes to key short-term interest rates, as expected. However, it did bring an announcement of the first reduction in the Fed’s current bond buying program. They announced that the current pace of $85 billion in monthly purchases of government and mortgage debt would be reduced by $10 billion starting next month. This move wasn’t exactly expected at this meeting, but didn’t surprise some traders and market analysts. It was bound to come sooner or later and it turns out sooner was today.

Also worth noting was an indication that the Fed may keep key short-term rates at current levels “well past the time” the U.S. unemployment rate falls to 6.5%. That was a benchmark that previously was expected to cause the Fed to start raising rates that would help prevent inflation from growing rapidly. It now appears that 6.5% may not be the trigger that will lead to incremental increases in key short-term interest rates. This is pretty relevant because the unemployment rate fell to 7.0% last month. Chairman Bernanke and friends are now predicting the unemployment rate to be between 6.3% and 6.6% at the end of next year, down from the previous estimate of 6.4% – 6.8%.

The initial knee-jerk reaction in the markets was for stocks and bonds to sell. However, they rebounded from their earlier lows. Stocks have made the biggest move with the Dow now up 237 points and the Nasdaq up 31 points. The bond market has not rebounded into positive territory but has erased the initial post-meeting move. It currently is down 9/32, which is close to where it was when we posted this morning’s commentary. I am sure many lenders either suspended or revised rates higher as the markets made their first move. However, we should now be close to this morning’s rates, meaning this afternoon’s events had nearly a net zero impact on mortgage rates.

We technically had three economic reports posted early this morning but they were all the same, just covering different months. The Commerce Department announced that September’s Housing Starts fell 2.0%, rose 1.8% in October and jumped 22.7% last month. The decline in September was a surprise and October’s increase wasn’t too far off from forecasts. November’s rise greatly exceeded expectations, indicating solid growth in the new home portion of the housing sector. Since September’s data is aged now and not nearly as relevant as last month’s starts, we should consider the news negative for the bond market and mortgage rates as it points towards economic strength.

Tomorrow has last week’s unemployment figures set for release at 8:30 AM ET and two monthly reports scheduled for 10:00 AM ET that we will be watching. The Labor Department is expected to announce that 333,000 new claims for unemployment benefits were filed last week. That would be a sizable decline from the previous week’s 368,000 initial claims, hinting at a strengthening employment sector. The higher the number of claims, the better the news it is for the bond and mortgage markets because rising claims is a sign of a weakening employment sector.

The second is November’s Existing Home Sales figures from the National Association of Realtors, giving us a measurement of housing sector strength and mortgage credit demand at 10:00 AM ET. It is expected to show a decline in sales, indicating a slowing housing sector. A sizable decline in sales would be considered positive for bonds and mortgage rates because a softening housing market makes broader economic growth more difficult. But unless the actual readings vary greatly from forecasts, the results will probably have little or no impact on mortgage rates.

The Conference Board will also release their Leading Economic Indicators (LEI) for the month of November late tomorrow morning. This release attempts to measure or predict economic activity over the next three to six months. It is expected to show a 0.6% increase, meaning that it predicts economic growth over the next several months. This probably will not have much influence on bond prices or affect mortgage rates unless it shows a much stronger reading than the 0.6% rise that is forecasted. The weaker the reading, the better the news it is for bonds and mortgage pricing.

 

Lake Tahoe Home Loans and Lake Tahoe Mortgage Loan Rates – December 16, 2013

Lake Tahoe Home Loans, Lake Tahoe Home Loan Rates, Lake Tahoe Mortgage Loans, Lake Tahoe Mortgage Loan Rates, and Lake Tahoe Mortgage Rates:

Monday’s bond market has opened in positive territory following mixed economic data and despite early stock strength. The major stock indexes are showing sizable gains during early trading with the Dow up 165 points and the Nasdaq up 33 points. The bond market is currently up 7/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point over Friday’s morning pricing.

There were two pieces of economic data posted this morning that were relevant to the mortgage market. The first was revised 3rd Quarter Productivity numbers at 8:30 AM ET. They showed a noticeable upward revision in worker output last quarter that exceeded forecasts. The preliminary reading indicated a 1.9% annual rate and forecasts were calling for 2.8% while both were short of the actual 3.0% that was posted this morning. This means workers produced more per hour than previously thought, making the data good news for the bond market and mortgage rates.

Today’s second release was November’s Industrial Production report at 9:15 AM ET that revealed a 1.1% increase in production at U.S. factories, mines and utilities. This was much stronger than the 0.4% that was predicted and the 0.1% increase that was October’s revised level, indicating the manufacturing sector may have been strong than many had thought last month. That makes the data negative for the bond and mortgage markets. Fortunately, this data is considered to be only moderately important or it could have had a much bigger impact on this morning’s pricing.

The rest of the week has seven more monthly or quarterly economic reports scheduled for release in addition to some key Fed events and a couple of Treasury auctions that could potentially affect mortgage rates. There is data set for release every day of the week, but the more important events will take place or be posted the middle days. Still, with the majority of the days having multiple reports or events scheduled, there is a good chance of seeing plenty of movement in mortgage pricing this week.

Tomorrow has the single most important report of the week with November’s Consumer Price Index (CPI) being posted at 8:30 AM ET. It is similar to last Friday’s Producer Price Index, except it tracks inflationary pressures at the more important consumer level of the economy. Current forecasts call for an increase of 0.1% in both the overall and core data readings. This data is one of the most watched inflation indexes, which is extremely important to long-term securities such as mortgage related bonds. Rising inflation erodes the value of a bond’s future fixed interest payments, making them less appealing to investors. That translates into falling bond prices and rising mortgage rates. Therefore, weak readings would be favorable for the bond market and mortgage shoppers.

Overall, Wednesday is the key day of the week due to the FOMC meeting results, revised economic forecasts and press conference with Chairman Bernanke. Tomorrow’s report is also key to the bond market, but I think we will see the most volatility in the markets and mortgage rates Wednesday. Despite the GDP reading, I believe Friday is the best candidate for calmest day. Generally speaking, this is probably going to be a pretty active week for the bond and mortgage markets. It is likely that I will remain very cautious towards rates until the benchmark 10-year Treasury Note yield breaks above 2.90% for more than a few minutes to see if that truly is a strong resistance level or if it will continue to rise above.

Lake Tahoe Home Loans and Lake Tahoe Mortgage Loan Rates – December 13, 2013

Lake Tahoe Home Loans, Lake Tahoe Home Loan Rates, Lake Tahoe Mortgage Loans, Lake Tahoe Mortgage Loan Rates, and Lake Tahoe Mortgage Rates:

Friday’s bond market has opened flat as have the stock markets. There was important economic data released this morning, but it appears the markets are shrugging it off. The Dow is currently unchanged from yesterday’s close while the Nasdaq is up 4 points. The bond market is nearly unchanged, which should keep this morning’s mortgage rates very close to yesterday’s morning pricing.

Yesterday’s 30-year Treasury Bond auction had similar results to Wednesday’s 10-year Note sale. At best we can consider investor demand at average but some indicators pointed towards weaker levels. Fortunately, the impact on afternoon bond trading yesterday was relatively minimal. We saw some selling that caused yields to rise immediately after but then they improved before returning to where they were right before the results were posted. The net effect on Thursday afternoon’s mortgage rates was minor.

November’s Producer Price Index (PPI) was today’s only relevant economic data. At 8:30 AM, the Labor Department announced a 0.1% decline in the overall reading and a 0.1% rise in the core data. The core data is the more important one because it excludes more volatile food and energy prices, but both readings pegged forecasts. This data tracks inflationary pressures at the producer level of the economy and today’s report shows that prices remain subdued. That is technically good news for the bond market and mortgage rates because rising inflation makes long-term securities such as mortgage-related bonds less attractive to investors. However, since the report showed no surprises, it is having very little impact on this morning’s mortgage pricing.

Next week is a contrast to this week in terms of events scheduled that may influence mortgage rates. There is relevant economic data set for each day of the week and varies from minor to extremely important. There also is the last FOMC meeting of the year, which will be followed by updated Fed economic predictions and a press conference hosted by Fed Chairman Bernanke. Monday’s data is moderately important with 3rd quarter worker productivity data and November’s Industrial Production both due to be released.

Lake Tahoe Home Loans and Lake Tahoe Mortgage Loan Rates – December 12, 2013

Lake Tahoe Home Loans, Lake Tahoe Home Loan Rates, Lake Tahoe Mortgage Loans, Lake Tahoe Mortgage Loan Rates, and Lake Tahoe Mortgage Rates:

Thursday’s bond market has opened in negative territory again following the release of mixed economic data. The stock markets are mixed with the Dow down 67 points and the Nasdaq up 6 points. The bond market is currently down 10/32, which should push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point from yesterday’s morning pricing.

Yesterday’s 10-year Treasury Note auction didn’t go particularly well. Several of the benchmarks we use to gauge investor demand pointed towards average or below-average interest. We have had weaker sales, but the lack of a strong demand considering where yields currently are helped fuel selling during afternoon hours yesterday. That doesn’t give us a lot to be optimistic about in today’s 30-year Bond auction. If we see better interest in today’s sale, we could see afternoon strength in bonds instead of the weakness that we saw yesterday. Results will be posted at 1:00 PM ET, so any reaction will likely come during early afternoon trading.

The week’s first relevant economic data was released early this morning. The Commerce Department released November’s Retail Sales report at 8:30 AM ET, announcing an increase of 0.7% in retail-level sales last month. This was slightly stronger than the 0.6% that was expected, meaning consumers spent more than many had thought. Even a secondary reading that tracks sales excluding more pricey and volatile auto transactions came in a bit stronger than forecasts. The variances in November’s data weren’t enough to get too concerned about, but upward revisions to both readings for October helped make the data negative for the bond market and mortgage rates.

Last week’s unemployment figures were also posted early this morning. The Labor Department said that new claims for unemployment benefits spiked to 368,000 last week, greatly exceeding forecasts of 315,000 new claims and the previous week’s revised total of 300,000. It was also the largest weekly increase in a little more than a year. It appears other than a later than usual Thanksgiving holiday, there is no specific cause for the jump. Therefore, we can consider the data very good news for the bond and mortgage markets because rising claims indicates a weakening employment sector. The bad news is that this is only a weekly report, so its impact on today’s bond trading and mortgage pricing was limited compared to what such a surprise would have in a monthly report.

Tomorrow morning brings us the release of November’s Producer Price Index (PPI) at 8:30 AM. It measures inflationary pressures at the producer level of the economy and is considered to be an important piece of data for the bond market. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices, giving a more stable reading for analysts to consider. If it reveals stronger than expected readings tomorrow, indicating that inflationary pressures are rising, the bond market will probably react negatively and drive mortgage rates higher. If we see in-line or weaker than expected numbers, the bond market should respond well and mortgage rates could fall. Current forecasts are showing a 0.1% decline in the overall index and a 0.1% rise in the core data.

Lake Tahoe Home Loans and Lake Tahoe Mortgage Loan Rates – December 11, 2013

Lake Tahoe Home Loans, Lake Tahoe Home Loan Rates, Lake Tahoe Mortgage Loans, Lake Tahoe Mortgage Loan Rates, and Lake Tahoe Mortgage Rates:

Wednesday’s bond market has opened in negative territory despite early weakness in stocks. The major stock indexes are showing moderate losses during early trading. The Dow is currently down 51 points to remain below 16,000 while the Nasdaq has lost 18 points. The bond market is currently down 8/32, but due to additional gains during late trading yesterday, we should see little change in this morning’s mortgage rates if comparing to Tuesday’s early pricing. This morning’s early weakness more or less offset yesterday’s late strength.

As has been the case thus far this week, there is no economic data relevant to mortgage rates scheduled to be posted today. We do have the first of this week’s two Treasury auctions that have the potential to influence mortgage pricing though. 10-year Treasury Notes are being sold today while 30-year Bonds will be auctioned tomorrow. Today’s auction is a little more important than tomorrow’s will be and is likely to have a bigger influence on mortgage rates. Results of the sales will be posted at 1:00 PM ET each day. If they are met with a strong demand from investors, particularly international buyers, we should see strength in the broader bond market and improvements to mortgage pricing during afternoon hours. On the other hand, a weak interest in the auctions could lead to upward revisions to mortgage rates after results are posted.

Besides the 30-year Bond auction tomorrow, we also get the week’s first economic news. There are two pieces of data scheduled for release at 8:30 AM ET tomorrow, but one is much more important to the financial and mortgage markets than the other. The key data is November’s Retail Sales report from the Commerce Department. It will give us a key measurement of consumer spending by tracking sales at retail level establishments. This data is highly important to the markets because consumer spending makes up over two-thirds of the U.S. economy. Rapidly rising consumer spending raises the possibility of seeing solid economic growth. Since long-term securities such as mortgage bonds are usually more appealing to investors during weaker economic conditions, a large increase in retail sales will likely drive bond prices lower and mortgage rates higher tomorrow. Current forecasts are calling for an increase of 0.6% in November’s sales.

Also early tomorrow morning, we will get last week’s unemployment figures. The Labor Department is expected to announce that 315,000 new claims for unemployment benefits were filed last week, up from the surprisingly low 298,000 of the previous week. Rising initial claims indicates a softening employment sector, so the higher the number of new filings, the better the news it is for bonds and mortgage rates. However, since this report tracks only a single week’s worth of initial claims, it usually takes a wide variance from forecasts for the data to affect mortgage pricing.

 

Lake Tahoe Home Loans and Lake Tahoe Mortgage Loan Rates – December 9, 2013

Lake Tahoe Home Loans, Lake Tahoe Home Loan Rates, Lake Tahoe Mortgage Loans, Lake Tahoe Mortgage Loan Rates, and Lake Tahoe Mortgage Rates:

Monday’s bond market has opened in positive territory, extending Friday’s strength. The stock markets are starting the week fairly flat with the Dow and Nasdaq both up 9 points. The bond market is currently up 12/32, which should improve this morning’s mortgage rates by approximately .125 – .250 of a discount point over Friday’s morning pricing.

There is nothing of importance scheduled for release today in terms of economic data. However, there are several afternoon speaking engagements by Federal Reserve members. The topics of a couple of the speeches are related to the economy, so analysts and traders will be watching them for any surprises or tidbits that could alter forecasts of what future moves the Fed may make and when they will be made. Often these appearances are non-factors because they are related to banking rules or other boring topics. Since some of today’s speeches look to be directly related to current and future economic conditions, we could see one or more of them affect afternoon trading and mortgage pricing.

The rest of the week has only two relevant monthly economic reports scheduled for release in addition to a couple of Treasury auctions that have the potential to influence mortgage rates. Both of the economic releases are considered highly important though and the Treasury auctions are the more important set of auctions we regularly deal with, so despite the lack of a busy calendar we still should see a fairly active week in rates.

We have Treasury auctions to watch Wednesday and Thursday while the economic data comes Thursday (November’s Retail Sales) and Friday (November’s Producer Price Index). I suspect Thursday will be the most active day of the week with the consumer spending data and 30-year Bond auction, but Friday’s data can also cause movement in rates. The calmest day will likely be tomorrow, unless something unexpected happens. Overall, it will probably be a calmer week than last week in terms of mortgage rate movement although we still should see rate changes multiple days.

The benchmark 10-year Treasury yield closed last week at 2.88% after touching 2.92% immediately after November’s stronger than forecasted Employment report was posted. I believe this week will help determine if that yield will break above 2.90% again or retreat towards 2.62%. Since mortgage rates tend to follow bond yields, the latter would be preferred by mortgage shoppers.

Lake Tahoe Home Loans and Lake Tahoe Mortgage Loan Rates – December 6, 2013

Lake Tahoe Home Loans, Lake Tahoe Home Loan Rates, Lake Tahoe Mortgage Loans, Lake Tahoe Mortgage Loan Rates, and Lake Tahoe Mortgage Rates:

Friday’s bond market opened in positive territory before tanking immediately after this morning’s first round of economic was released, then moved back to yesterday’s closing level. The stock markets are showing sizable gains with the Dow up 126 points and the Nasdaq up 21 points. The bond market is currently almost unchanged from yesterday’s close, but we still should see a slight improvement in this morning’s mortgage rates.

This morning’s big news was the release of November’s Employment report that showed the U.S. unemployment rate fell from 7.3% in October to 7.0% last month. This was lower than the 7.2% that was expected and the lowest rate we have seen since November 2008. The payroll number added to the theme of employment sector strength with 203,000 new jobs when analysts were expecting around 188,000. Upward revisions to September and October only netted 8,000 more jobs than previously announced. And the average earnings readings pegged forecasts with a 0.2% increase.

The second report of the morning was October’s Personal Income and Outlays that showed a 0.1% decline in income and a 0.3% increase in spending. Forecasts were calling for a 0.3% increase in both readings, so the income data was a sizable miss. That makes the data favorable to the bond market and mortgage rates because smaller income levels mean consumers have less money to spend.

Lastly, December’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment came in just before 10:00 AM ET at 82.5. This was considerably higher than the 75.1 that was expected and was November’s final reading, meaning surveyed consumers were much more confident in their own financial and employment situations than many were expecting. That translates into higher expectations for consumer spending, making the data negative for the bond market and mortgage rates.

Overall, I believe the bond market has fared pretty well this morning considering the importance of the Employment data. It appears that some traders were expecting to see larger gains in jobs than forecasts were showing, so the gains that we did see didn’t look so bad. This week’s ADP employment report showed sizable upward revisions to previous payroll numbers, so the lack of seeing the same in today’s government report can also be considered a positive for bonds. But what I think is preventing a highly negative morning more than anything else is the fact that the benchmark 10-year yield broke above 2.90% earlier this morning, which looks to be a strong resistance level. I don’t think we are completely out of danger yet in terms of rising mortgage rates, but at this level I would feel a little more comfortable floating a rate than I have been over recent weeks. I have been calling for yields to rise to this range before we would likely see a downward trend! in mortgage rates again, so it is time to review recommendations for a possible shift to a less conservative stance.

Next week has only a couple pieces of economic data scheduled for release, but they are considered highly important and will be posted the latter part of the week. There are also a couple Treasury auctions that are known to be influential to mortgage rates the middle days. I don’t see anything of importance set for Monday, so we can expect weekend news and possibly this afternoon’s trading to set the opening tone for the week.

Lake Tahoe Home Loans and Lake Tahoe Mortgage Loan Rates – December 5, 2013

Lake Tahoe Home Loans, Lake Tahoe Home Loan Rates, Lake Tahoe Mortgage Loans, Lake Tahoe Mortgage Loan Rates, and Lake Tahoe Mortgage Rates:

Thursday’s bond market opened in negative territory again following the release of stronger than expected economic data. Stocks are fairly flat with the Dow down 9 points and the Nasdaq up 2 points. The bond market is currently down 4/32, but due to strength during early afternoon trading yesterday we will likely see little change in this morning’s mortgage rates if comparing to yesterday’s morning pricing.

Yesterday’s afternoon release of the Fed Beige Book didn’t reveal any significant surprises. Most of the regional updates showed similar results to the previous versions in employment, housing and manufacturing activity. In short, the report indicated that many sectors continued to grow at a moderate pace. This was expected and didn’t cause much alarm or joy in the markets yesterday. The improvement in bonds and mortgage rates yesterday came after morning pricing was issued but before the Beige Book release.

The first of today’s three pieces of economic data was the revised 3rd Quarter Gross Domestic Product (GDP) at 8:30 AM ET. It came in with a 3.6% annual rate of growth, exceeding forecasts and was much stronger than the initial 2.8% estimate. Since the GDP is the total of all goods and service produced in the U.S. during the quarter, this means the economy was much stronger than many had thought. And because weaker economic conditions make long-term bonds more appealing to investors, this was clearly bad news for the bond market and mortgage rates.

We also got last week’s unemployment numbers early this morning, but they didn’t bring any better news. Today’s release showed that 298,000 new claims for unemployment benefits were filed last week. This was well short of forecasts (330K) and a noticeable decline from the previous week’s revised total of 321,000, indicating a strengthening, not weakening employment sector. Therefore, this data is also negative news for mortgage rates.

The Commerce Department announced late this morning that October’s Factory Orders fell 0.9%, pointing towards manufacturing sector weakness. However, this was close to forecasts of a 1.0% decline and came in a moderately important report, so its impact on this morning’s trading has been minimal.

Tomorrow has three more reports being released, including one of the most important reports we see each month. The key Employment report for November will be released at 8:30 AM ET and all eyes in the markets will be watching. It is comprised of many statistics and readings, but the most watched ones are the unemployment rate, the number of news jobs added or lost during the month and average hourly earnings. Current forecasts call for a 0.1% decline in the unemployment rate to 7.2% while 188,000 new jobs were added to the economy. The income reading is forecasted to show an increase of 0.2%. An ideal scenario for mortgage shoppers would be a higher unemployment rate than October’s 7.3%, a smaller increase in payrolls (or a decline) and no change in the earnings reading. If we are fortunate enough to hit the trifecta with all three, we should see the stock markets fall, bond prices rise and mortgage rates move much lower tomorrow. However, stronger than expected readi! ngs would likely fuel a stock rally and bond sell-off that would lead to mortgage rates moving higher again.

October’s Personal Income and Outlays data is scheduled for early tomorrow morning also. This data measures consumers’ ability to spend and their current spending habits. This is important because consumer spending makes up over two-thirds of the U.S. economy. It is expected to show that income rose 0.3% and that spending increased 0.3%. Weaker than expected readings would mean consumers had less money to spend and were spending less than thought. That would be theoretically favorable news for bonds and mortgage pricing, although the Employment data will be the focus of tomorrow morning’s trading.

The final report of the week is the release of December’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment just before 10:00 AM ET tomorrow. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates slightly if it shows a sizable miss from forecasts. Consumer sentiment or confidence is tracked because the more comfortable consumers are about their own financial situations, the more likely they are to make a large purchase in the near future. Since consumer spending makes up over two-thirds of the economy, any related data is watched closely. It is expected to show a reading of 75.1, which would be no change from last month’s final reading of 75.1. A large decline in confidence would be considered good news for the bond market and mortgage rates.

Lake Tahoe Home Loans and Lake Tahoe Mortgage Loan Rates – December 4, 2013

Lake Tahoe Home Loans, Lake Tahoe Home Loan Rates, Lake Tahoe Mortgage Loans, Lake Tahoe Mortgage Loan Rates, and Lake Tahoe Mortgage Rates:

Wednesday’s bond market opened in negative territory as yesterday’s late weakness carried into overnight and early morning trading. Those losses expanded after the release of a private-sector employment-related reports that showed much stronger results than expected. The stock markets are showing minor gains with the Dow up 24 points and the Nasdaq up 11 points. The bond market is currently down 15/32, which with yesterday’s afternoon weakness will likely push this morning’s mortgage rates higher by approximately .500 – .625 of a discount point higher than Tuesday’s morning pricing.

There were three economic reports posted this morning, but none were considered to be highly important. The first was October’s Goods and Services Trade Balance at 8:30 AM ET that revealed a $40.6 billion trade deficit. This nearly matched forecasts and had no impact on this morning’s mortgage pricing.

Late this morning, September and October’s New Home Sales reports were released. They showed that sales of newly constructed homes fell in September but spiked in October. The 25.4% increase in sales in October was a record that dates back over 30 years. This indicates recent growth in the new home portion of the housing sector, making the data negative for the bond market and mortgage rates.

None of that data had much of an impact on this morning’s trading. What did catch everyone off-guard was the ADP payroll report that tracks changes in their client’s payroll numbers in the private sector. Since this isn’t nearly as complete as the monthly governmental Employment report, it usually has a minimal effect on the bond market and mortgage rates. Today is one of those exceptions because it showed a sizable upward revision to October’s numbers (130K to 184K) and 215,000 new jobs in November when analysts were expecting to see only 160,000. Those numbers point towards strong employment sector growth over the past two months, making it extremely unfavorable to the bond and mortgage markets. This is especially true because the monthly Labor Department report will be posted Friday morning and some traders are now expecting to see stronger numbers in October and November’s data from that report also.

As if there wasn’t enough going on already today, we have more to watch this afternoon. The Federal Reserve will release their Beige Book at 2:00 PM ET today. The report is named simply after the color of its cover and details economic conditions by Fed region. That information is relied upon heavily during the FOMC meetings when determining monetary policy, so its results can influence bond trading and mortgage rates if it shows any noticeable changes from the last update. More times than not though, this report will not influence the markets enough to cause intra-day changes to mortgage rates, but the potential to do so does exist. Accordingly, if we get a reaction to the report, it will come shortly after 2:00 PM ET.

Tomorrow has three more pieces of economic data that we need to watch. The first of two revisions to the 3rd Quarter Gross Domestic Product (GDP) will be posted at 8:30 AM ET morning. It is expected to show an upward revision from last month’s preliminary reading of a 2.8% annual rate of growth. The GDP measures the total of all goods and services produced in the U.S. and is considered to be the best measurement of economic activity. Current forecasts call for a 3.0% rate of growth, meaning that there was a little more economic activity during the third quarter than previously thought. This would be bad news for mortgage rates because solid economic growth makes long-term securities such as mortgage-related bonds less appealing to investors. A modest increase shouldn’t be too detrimental to rates since it is expected. On the other hand, a sizable revision upward or downward could significantly influence the financial and mortgage markets.

Also at 8:30 AM, we will get last week’s unemployment numbers from the Labor Department. They are expected to announce that 330,000 new claims for unemployment benefits were filed last week, up from the previous week’s 316,000. The higher the number of new claims, the better the news it is for mortgage rates because rising claims indicates a weakening employment sector.

October’s Factory Orders will be posted late tomorrow morning. This report is similar to the Durable Goods Orders report that was released last week, except this one includes manufacturing orders for both durable and non-durable goods. This data usually isn’t a major influence on bond trading, but it does carry enough importance to impact mortgage rates if it shows a sizable variance from forecasts. Analysts are expecting to see a 1.0% decline in new orders. Ideally, we would like to see a larger decline in orders as it would signal manufacturing sector weakness.