Market Commentary

[Adam in CO]

Friday?s bond market has opened up slightly following news of a much weaker than expected consumer sentiment report. The stock markets are mixed with the Dow up 10 points and the Nasdaq down 11 points. The bond market is currently up 2/32, but I am expecting to see little change in this morning?s mortgage rates.

Today?s only relevant economic news came in much weaker than expected. The University of Michigan Index of Consumer Sentiment showed a reading of 78.7 compared to last month?s 84.7. Analysts were expecting to see a reading of 84.0, indicating that consumer confidence was much lower than expected. This is good news for bonds and mortgage rates because waning sentiment usually means consumers are less apt to make large purchases in the near future.

I am still concerned about seeing traders sell bond holdings to capture profits from the recent rally. This could lead to mortgage rates inching higher, especially with little economic news to drive bond prices higher. Accordingly, I am holding the current lock/float recommendations until at least next week.

Next week is pretty light in terms of economic releases with only one important report on tap. There are two housing related reports due to be posted and a manufacturing report, but none of them are scheduled for Monday or Tuesday. Look for more details in Sunday?s weekly preview.

[CO Hummer]

I'm not falling for this again.

[KenP]

Barring anything unforeseen, I think we're headed for a strong few months.