Archive for October, 2008
Mortgage Commentary 10/6/2008:
- Monday’s bond market has opened up sharply after this morning’s stock markets are selling off again. The Dow is currently down 450 points while the Nasdaq has 100 points. The bond market is currently up 29/32, which will likely improve this morning’s mortgage rates from Friday approximately .375 of a discount point. Additional improvements may be likely today.
This morning’s stock losses has pushed the Dow below the 10,000 mark for the first time since late October 2004. I appears that this trend may continue, at least for the short-term and should benefit bonds as investors seek safe-haven.
This week brings us only one monthly economic report for the markets to digest and it is not considered to be of high importance. This means that the week will be left mostly up to the stock markets and other influences since there is a lack of factual data for bonds to trade on. In addition to the one report, we will also get the minutes from the last FOMC meeting that can also cause movement in rates if it reveals any surprises.
The first news of the week comes tomorrow afternoon when the Fed will release the minutes to the last FOMC meeting. These may be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed’s next move. If the Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates higher tomorrow afternoon. However, if they indicate that inflation is easing and that a rate increase is not likely in the coming months, we should see the bond market rise and mortgage rates drop during afternoon trading.
