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 in positive ground following the release of three economic reports that gave us mostly favorable results. The stock markets are mixed with the Dow up 32 points and the Nasdaq down 12 points. The bond market is currently up 5/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point.
Yesterday’s 30-year Treasury Bond auction went fairly well but not nearly as
strong as Wednesday’s 10-year Note sale did. A couple of the indicators we use pointed towards a decent level of interest from investors, but not overwhelmingly strong. Others showed average results that were close to recent auctions. The news didn’t have much of an impact on bond trading yesterday afternoon.
There were three pieces of economic data posted this morning that were relevant to mortgage rates. The first was the highly important Retail Sales data from the Commerce Department. They announced early this morning that retail-level sales rose only 0.2% last month when analysts were expecting to see a 0.4% increase. Even the secondary reading that tracks sales excluding more volatile auto transactions came in light (up 0.1% versus 0.3%). Since that indicates consumers spent less than expected last month, we should consider the data good news for the bond market and mortgage rates. However, an upward revision to July’s sales has limited the reaction to August’s numbers.
The Labor Department posted August’s Producer Price Index (PPI) at 8:30 AM ET this morning also, revealing a 0.3% increase in the overall reading and no
change in the core data. Analysts were predicting a 0.2% rise in the overall
reading, so we should consider it slightly negative for mortgage rates.
However, forecasts were calling for a 0.1% increase in the more important core
reading that excludes volatile food and energy prices, mean core inflationary
pressures were softer than many had thought. Therefore, we are looking at the
results as neutral-to-slightly positive for the bond and mortgage markets.
Today’s third and the week’s final piece of relevant data came from the
University of Michigan late this morning. They announced that their Index of
Consumer Sentiment fell from 82.1 in August to 76.8 this month. What this means is that fewer surveyed consumers were optimistic about their own financial situations than in August. That is clearly good news for the bond market and mortgage pricing because waning consumer confidence usually translates into weaker levels of consumer spending that makes up such a hefty part of our overall economy. Weakening confidence in job stability and general financial situation means a consumer is less likely to make a large purchase in the near future, limiting economic growth.
Next week is going to be interesting to say the least. There is economic data
set for release Monday that can influence mortgage rates, although it is not a
highly important report (August’s Industrial Production). There are more
important reports also scheduled for release during the week, however all eyes
will be focused on the two-day FOMC meeting that will adjourn Wednesday and
will be followed by revised Fed economic forecasts and a press conference with
Chairman Bernanke. Look for details on next week’s events in Sunday’s weekly
preview, but a spoiler alert…… Wednesday is the key day of the week, month,
quarter and possibly the year due to the expectations of the Fed reducing or
tapering their current monthly bond purchase program.