Thursday, May 1st
Thursday’s bond market has opened in negative territory following mixed economic news. Early stock gains may be contributing to this morning’s soft opening in bonds with the Dow up 235 points and the Nasdaq up 283 points. The bond market is currently down 5/32 (4.18%), but a little strength in bonds late yesterday should keep this morning’s mortgage rates nearly unchanged from Wednesday’s morning pricing.
5/32
Bonds
30 yr - 4.18%
235
Dow
40,894
283
NASDAQ
17,730
Trailing 90 Days - National Average
Medium
Positive
Last week’s unemployment update was the first of this morning’s two economic releases. It showed 241,000 new claims for jobless benefits were filed last week, up from the previous week’s revised 223,000 initial filings and the highest number since last October. The consensus was a figure around 225,000. The increase indicates weakness in the employment sector that makes the data good news for bonds and mortgage rates.
High
Negative
The Institute for Supply Management (ISM) announced late this morning that their April manufacturing index stood at 48.7. This was lower than March’s 49.0 but higher than the 47.9 that was expected. That means manufacturer sentiment about business conditions was a bit softer last month than in March, but still stronger than thought. Accordingly, we are labeling the report neutral to slightly negative for mortgage rates.
High
Unknown
Tomorrow brings us the release of the almighty monthly Employment. It will give us details about the employment sector, such as April’s unemployment rate, the number of jobs added to the economy during the month and earnings data. This is an extremely influential report for the financial and mortgage markets. It is expected to show that the unemployment rate held at 4.2% and that approximately 130,000 jobs were added during the month, while earnings rose 0.3%. A higher unemployment rate and a much smaller increase in the payroll and earnings numbers would be good news for bonds and rates because they would signal weaker than thought conditions in the employment sector of the economy. Stronger than expected results will probably lead to bond selling, possibly causing a sizable increase in mortgage pricing tomorrow.
Medium
Unknown
March's Factory Orders report will close out this week’s economic calendar at 10:00 AM ET tomorrow morning. This data is similar to the Durable Goods Orders report that was posted last week, except it includes orders for both durable and non-durable goods. It will also give us a measurement of manufacturing sector strength but is considered to be only moderately important to the bond and mortgage markets. That is partly because a big portion of the data was already released with the Durable Goods Orders report, meaning it will likely have a minimal impact on mortgage rates. It is predicted to show a 4.3% jump in orders as businesses tried to get ahead of tariffs.
If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.