Tuesday’s bond market has opened flat with nothing of importance scheduled for today. The major stock indexes are mixed with the Dow down 124 points and the Nasdaq up 8 points. The bond market is currently up 1/32, which should keep this morning’s mortgage rates at yesterday’s levels.
Stocks are reacting to disappointing earnings news from some big-named companies including IBM and United Technologies that are part of the Dow. This by theory should help boost bond prices but we have not seen much of a reaction yet. If the Dow extends its early losses and the Nasdaq gives back its morning gains, we could see bonds react positively later today.
Tomorrow has the week’s first piece of relevant economic data with the release of June’s Existing Home Sales figures. The National Association of Realtors will post this report at 10:00 AM ET tomorrow. This report gives us a measurement of housing sector strength and mortgage credit demand. Current forecasts are calling for a small increase in sales from May’s totals. A drop in sales would be considered good news for bonds and mortgage rates because a weakening housing sector makes broader economic growth more difficult. However, unless this data varies greatly from forecasts it probably will lead to only a minor change in mortgage rates.