note from the desk of Miguel Velazco Sr. MBA
Week of: Monday, March 05, 2012
Present Market Conditions
Monday’s bond market has opened down slightly due to stronger than expected
economic news even though we are seeing selling in stocks. The Dow is currently
down 61 points. The bond market is currently down ( higher yield and higher
mortgage rates), which may push this morning’s mortgage rates slightly higher
than Friday’s morning pricing.
The Commerce Department announced late this morning that new orders for durable
and non-durable goods fell 1.0% in January. This was a much smaller decline than
the 1.9% that was expected, hinting at a stronger manufacturing sector than
many had thought. This makes the data negative for bonds and mortgage rates,
but because it is considered to be only moderately important it has had a
limited impact on this morning’s rates.
The rest of the week has three government economic reports
scheduled, but only one is considered to be highly important. The other reports
are moderately important to the markets, meaning they have the potential to
affect mortgage rates but usually don’t cause a noticeable change. The most
important data comes at the end of the week, but sizable moves in stocks can
impact bond trading and mortgage rates any day.
Today’s early weakness in stocks is a good sign for bonds. The
major stock indexes have been overdue for a pullback in my opinion, especially
since they could not break and hold thresholds of 13,000 in the Dow and 3,000
for the Nasdaq. The Dow is below 12,900 at the moment. If stocks continue to
slide with some momentum, we could see funds shift into bonds as a safe-haven,
driving mortgage rates lower.
There is nothing of relevance scheduled for tomorrow, but look for a fairly
active week overall in the markets and mortgage rates. The importance of the
week’s data rises as the week’s progresses, ending with the almighty monthly
Employment report Friday morning. That makes Friday the biggest of the week and
we can label tomorrow as the best candidate for least important.
Direct: 1-888-MIGUEL-8 or 1-888-644-8358