Incline Village Home Loans, Incline Village Mortgages, Incline Village Mortgage Rates and Incline Village Home Loan Rates:
Friday’s bond market initially opened well in positive ground following the release of January’s Employment report but has since given back some of that early move. The stock markets reacted similarly with a significant downward move in futures before rebounding well into positive ground. The major stock indexes are now off their highs of the morning with the Dow currently up 32 points and the Nasdaq up 18 points. The bond market is currently up 8/32 (2.67%), which should improve this morning’s mortgage rates by approximately .250 of a discount point.
The Labor Department gave us this morning’s key economic data, announcing that the U.S. unemployment rate slipped 0.1% to 6.6% last month while 113,000 new jobs were added to the economy. The unemployment rate was expected to remain at 6.7%, but this figure didn’t draw that much attention. The payroll number was well below the 175,000 that was forecasted, signaling weaker than predicted job growth and causing this morning’s early volatility in the markets. Even December’s payroll number that was expected to be revised much higher changed only from 74,000 jobs to 75,000. This means that jobs are being added to the economy at a much slower pace than many had thought and well below what is believed to point towards a healthy economy.
As expected once the headline numbers crossed the wires, the bond market jumped higher (yields moved lower) while stock futures went from showing early gains to looking like a solid negative open was coming. After a few minutes, that changed direction with stocks steadily moving off the morning lows and eventually breaking into positive ground. As that pattern continued, bonds started giving back some of their gains as the initial flight-to-safety reaction lost traction. It is difficult to say if this reversal will continue throughout the day, possibly leading to bond losses and upward revisions to mortgage rates this afternoon. However, I strongly recommend watching the markets because that is a viable possibility.
Next week has only a couple of economic reports scheduled for release that are likely to affect mortgage rates, but one of those is considered to be highly important. In addition to the data, we also have a couple of Treasury auctions and the Fed Chairman’s semi-annual testimony to Congress on the status of the economy and monetary policy. This will be the first appearance under Janet Yellen’s chairmanship and could bring plenty of volatility in the markets during day one of the testimony. There is nothing scheduled for Monday that we need to be concerned with, so weekend news and stock trading will likely drive bond trading and mortgage pricing.