It's Monday morning and we are starting of with some mixed data. The benchmark bonds started the day off on a down note with Personal Spending coming in as expected at +.2 (down considerably from the previous reading of .9) and Personal Income slightly higher than expect at +.4 vs. .3 expected (previous was also .4). Based on this news and the fact that the mortgage bond market is overbought (according to the RSI), the FNMA benchmark bond was down as much as 8 basis points and the GNMA was underperforming the FNMA as it was down 21 basis points (the GNMA out performed the FNMA on Friday as it was up 54 basis points vs. 39 for the FNMA).
At 10:00 a.m. EDT Construction Spending was released and it disappointed in a fairly big way coming in at .1 vs. estimates of .6 and previous of 1.8. Additionally, the ISM Manufacturing Index came in at 52.7 vs. consensus estimates of 53.7 and previous of 53.5. With this data, the market did an about-face and the FNMA is now up 16 basis points while the GNMA is even.
If you didn't lock on Friday, now would be a great time to lock, especially with lots of data being released this week and potential volatility based on that data. As always, if you don't lock, keep a watchful eye on mortgage rates since they can move quickly - especially the first week of the month with so much jobs data and with the RSI being overbought. Feel free to contact me if I can help with anything mortgage-related - 702-812-1214.
On a lighter note, if you are a sports fan or just like feel-good stories, you will enjoy the Wilmer Flores story that took place last week. Flores is a SS / 2nd baseman for the Mets who appeared to be involved in a trade to the Milwaukee Brewers. The fans at CitiField (the Met's stadium) found out about the trade during Thursday night's game via social media and Flores found out about it around the same time. Flores is 23 and was signed by the Mets when he was 16. He's from Venezuela and only really knew NYC. The Met's fans gave him a standing ovation when he took the field in the 6th or 7th inning after they found out about the trade and he became very emotional and teared up. The Met's GM announced after the game that the trade did not happen and will not happen. Then next night, Wilmer Flores hit the game winning home run in the bottom of the 8th inning. He has become a hero for Met's fans. Make it a great day.