Daily Market Update

Daily Market Commentary Today's Commentary
Updated on August 17, 2018 10:37:03 AM EDT Friday’s bond market has opened in positive territory following mixed economic data and soft opening in stocks. The major stock indexes are showing early losses of 18 points in the Dow and 43 points in the Nasdaq. The bond market is currently up 5/32 (2.85%), which should improve this morning’s mortgage rates by slightly less than .125 of a discount point.

There were two mortgage rate-relevant economic reports posted late this morning. The Conference Board announced a 0.6% rise in their Leading Economic Indicators (LEI) for July. This was slightly higher than the 0.5% that was expected, but not enough of a variance to cause much concern. The index attempts to measure economic activity over the next three to six months, so they are pointing towards moderate growth this fall. By theory, that is unfavorable news for mortgage rates since it hints at economic growth. However, because it was a small miss from forecasts and the report isn’t considered to be an upper tier release, we have not seen a reaction to the news.

The second release of the morning was the University of Michigan’s Index of Consumer Sentiment for August. It came in at 95.3, falling well short of the 97.8 that was forecasted. This is good news for bonds and rates because the weaker sentiment reading indicates consumers are less optimistic about their own financial and employment situations than they were last month. Because declining confidence usually means consumers are less likely to spend, the data is good news for mortgage shoppers.

Next week has a couple of relevant economic reports scheduled for release with one being considered important. In addition to the data, we also will get the minutes from the last FOMC meeting and the annual Jackson Hole Economic convention. All of the events are scheduled for mid-week and later, so expect the calmer days for mortgage pricing to probably come earlier in the week. Look for details on next week’s activities in Sunday evening’s weekly preview.


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