Welcome back, Folks! I apologize for not updating this over the past couple of days; I was in Central/Upstate New York visiting family! Anyway, here is the update for today!
Flat is the only explanation for the bond market today. Contrary to weak economic news releases and the early decreases in the stock market, the bonds haven't really changed at all today (so far). The Dow is down by about 45 points, and the Nasdaq is down by 3 points thus far. As of right now, the mortgage pricing will probably be left unchanged until this afternoon.
The Consumer Confidence Index for October fell to 95.6 which is significantly lower than anticipated! What this shows is that consumers were less confident in their personal finances than expected. Even though this is bad news for retail areas, it is good news for bonds and the mortgage market because consumers are likely to spend less and/or slow in the very near future. The only reason that we have not seen this release have an effect on the market yet is due to the FOMC meeting that is the "be all end all" for the week's news.
With regard to releases for tomorrow, The 3rd Quarter Gross Domestic Product (GDP) is scheduled for release. I would and will personally keep an eye on this report because it is considered to be an extremely significant measurement of the economy's growth. This report could and most likely will have a huge impact on the entire financial market and will more than likely influence mortgage pricing as well. Here's a heads up on the "what if's": if the estimates are matched rates will most likely rise, but if there is a smaller than expected increase the pricing will improve!
Along with the GDP tomorrow, the third Quarter ECI (Employment Cost Index) is going to be published. The ECI tracks and monitors salaries/bene's for employers, and could greatly impact the view on inflation. If the report shows a significant and rapid rise in costs, inflation will be a huge concern. There is a .9% anticipated increase, but anything lesser than that number will be great news for the mortgage pricing and bond markets! Keep an eye out for this!
And finally, the world is tuning in to the FOMC meeting that started today and will be released tomorrow afternoon. As expectations rise for yet another rate cut, the markets are flattened in anticipation. Honestly, I don't trust the overall outcome of this meeting, and definitely think there is going to be some significant movement tomorrow afternoon when the meeting statements are released.
That being said, I am going to be locking my applications/loans today so they are not affected by whatever is to come. It is just too unsure to float in my opinion!
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