Friday’s bond market has opened in negative territory despite early stock losses. The stock markets are showing relatively minor weakness, but it is an extension of yesterday’s selling. Even though yesterday was a holiday and the bond market was closed, the U.S. stock markets were open for business. The Dow closed down almost 74 points while the Nasdaq lost 23 points yesterday. With the Dow down 37 points this morning and the Nasdaq falling 11 points, we have noticeable losses in the major indexes since our last mortgage pricing Wednesday. Unfortunately, the bond market is not benefiting from the selling, currently down 9/32 from Wednesday’s close. This should push this morning’s mortgage rates higher by approximately .125 of a discount point compared to Wednesday’s morning rates.

Today did bring a piece of economic news to digest. November's preliminary reading of the University of Michigan’s Index of Consumer Sentim ent was posted late this morning. It revealed a reading of 69.3 that was an increase from October’s final reading and was a little higher than analysts had expected. This means that surveyed consumers were more optimistic about their own financial situations than they were last month. That is considered negative news for the bond market and mortgage rates because rising confidence means consumers are more apt to make large purchases in the near future, fuelling economic activity.

Next week is extremely busy in terms of economic releases. We have data scheduled to be released four of the five days with some of the data considered highly important to the markets. It starts early Monday morning when October’s Retail Sales data is posted. That report gives us a very important measurement of consumer spending, which is followed closely by the markets and mortgage lenders because it makes up two-thirds of the U.S. economy.

The rest of the we ek also has some important data for us to watch. It includes two key inflation readings and a manufacturing report that tracks production at U.S. factories, mines and utilities, along with a couple other reports. Look for more details on next week’s events in Sunday’s weekly preview, but it is likely to be a fairly active week for rates.

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... Float 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.

©Mortgage Commentary 2010