Tuesday’s bond market has opened flat with stocks mixed and no relevant economic or coronavirus news to drive trading. The Dow is currently up 159 points while the Nasdaq is down 3 points. The bond market is unchanged (0.68%), but another round of afternoon gains yesterday should lead to an improvement in this morning’s mortgage rates of approximately .125 of a discount point. If you saw an intraday downward revision yesterday, you likely will not see another move this morning. 0/32 Bonds 30 yr - 0.66% 159 Dow 25,634 3 NASDAQ 9,548
Indexes Affecting Rate Lock LowNeutralNoneThere is nothing scheduled for release today that we need to be concerned with. Stocks are also of no help with the major indexes mixed. If we see an intraday move in bonds and/or rates, it will probably be a result of an unexpected news headline. The most likely outcome for the day will be rates remaining near this morning’s levels. MediumUnknownADP EmploymentTomorrow has two releases set for release, starting with May's ADP Employment report at 8:15 AM ET. It has the potential to cause some movement in the markets if it shows much stronger or weaker numbers than expected. This report tracks changes in private-sector jobs, using ADP's payroll processing clients as a base. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not very accurate in predicting results of the monthly government report that follows a couple days later. Still, because we sometimes see a reaction to the report, we will be watching it. Analysts are expecting it to show that 9.0 million private sector jobs were lost during the month as a result of the pandemic and shutdown. The larger decline in jobs, the better the news it is for mortgage rates. MediumUnknownFactory OrdersAlso tomorrow morning but at 10:00 AM ET will be the release of April's Factory Orders data that is similar to last week’s Durable Goods Orders report. This release also includes orders for non-durable goods such as food and clothing. It can cause some movement in the financial markets if it varies from forecasts by a wide margin. However, it isn't expected to cause much of a change in rates tomorrow. Current forecasts are calling for a 13% decline in new orders from March's level. Weaker manufacturing numbers make long-term securities, such as mortgage bonds, more attractive to investors. It is worth noting though that this data is normally considered to be only moderately important since a good portion of the data in it has been released previously in the Durable Goods Order report.
Float / Lock Recommendation 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.
