Daily Market Update

Daily Market Commentary Today's Commentary
Updated on September 18, 2020 10:09:59 AM EDT Friday’s bond market opened in positive ground despite unfavorable economic data. Stocks are mixed but calm during early trading with the Dow down 11 points and the Nasdaq up 34 points. The bond market is currently up 2/32 (0.68%), but afternoon weakness yesterday is likely to cause this morning’s mortgage rates to be slightly higher than Thursday’s morning rates.

The first of this morning’s two 10:00 AM ET economic reports was the University of Michigan’s Index of Consumer Sentiment for September. It came in at 78.9, up from last month’s 74.1 and higher than forecasted. Since this index gives us an indication of consumer willingness to spend and consumer spending makes up over two-thirds of the U.S. economy, the higher reading is bad news for bonds and mortgage rates. Fortunately, the data is not looked at as a major release. Accordingly, it has had a minimal impact on today’s early trading and mortgage pricing.

Closing out this week’s calendar was August’s Leading Economic Indicators (LEI) from the Conference Board. They announced a 1.2% increase compared to the 1.3% that was expected. These indicators attempt to predict economic activity over the next several months, meaning they are showing an increase in activity this fall and winter. However, because this is considered to be only a moderately important report for the markets and the variance was minor, we can label this report as neutral for rates.

Next week has only a couple of relevant economic reports set for release but also has two days of congressional testimony from Fed Chairman Powell midweek. There is nothing in terms of economic data scheduled for Monday that we need to watch, however, there are a couple of Fed member speaking engagements. Look for details on all of next week’s activities in Sunday evening’s weekly preview.


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