Friday’s bond market has opened in negative territory following some unfavorable economic news. The stock markets are fairly calm but showing minor losses with the Dow down 26 points and the Nasdaq down 13 points. The bond market is currently down 14/32 (2.60%), which should push this morning’s mortgage rates higher by approximately .250 of a discount point over yesterday’s morning pricing.
There were two pieces of relevant economic data posted this morning. The first came at 8:30 AM ET when the Commerce Department released August’s Retail Sales figures. They revealed a 0.6% jump in retail-level spending and a 0.3% increase if more volatile auto-transactions are excluded. Both readings pegged forecasts, but the increases along with upward revisions to July’s results make the data negative for the bond market and mortgage rates.
The University of Michigan released their Index of Consumer Sentiment for September late this morning. It came in at 84.6, exceeding forecasts by a little more than a full point. That means surveyed consumers were more optimistic about their own financial situations than many had thought. This is also negative news for the bond and mortgage markets because rising confidence usually translates into higher levels of consumer spending.
Next week’s calendar is pretty active with relevant economic data scheduled for release each day, including Monday’s Industrial Production report. In addition to the handful of economic reports, it is also an FOMC week. There is a two-day meeting that adjourns Wednesday and will be followed by revised economic projections from the Fed and a press conference with Fed Chair Janet Yellen.