It's the Wednesday before Thanksgiving which means a short day for the financial markets and if you are like me or most people I know, your mind will likely be on traveling, the family and friends you'll be hanging out with, the Turkey Bowl (if you play some football on Thanksgiving morning), or the great meal you'll be eating (or the nap you'll probably take after the meal). Your mind probably won't be on work which means you probably won't be very efficient which means you'll probably take off early today if you aren't taking the entire day off - I've got an appointment at 2:00 today but other than that it's about getting the house ready and then family time when my daughter comes home from college.
But I digress. I said in my blog yesterday how the benchmark bond was trading in a really tight range. For the 2nd day in a row, it closed up 4 basis points and this morning it is down 3 basis points - there's probably two traders at work today and they're probably having a catered turkey lunch.
We did have a fair amount of data this morning including Jobless Claims (tomorrow is the only Thursday that isn't Jobless Claims Thursday). Here's how it all shook out and, yes, it's mixed - go figure. Jobless Claims came in at 260K vs. expectations of 270K. Core PCE (Personal Consumption Expenditures) came in as expected at 1.3%. Durable Goods Orders were 3.0% vs. expectations of 1.5%; ex-transportation they were .5% vs. .3% expected. Personal Spending came in at .1% vs. expectations of .3% (a slight correlation to the declining consumer confidence / sentiment numbers) - October's final Consumer Sentiment reading came in at 91.3, adjusted down from the previous reading of 93.1. Personal income also came in as expected at .4%. Finally, October New Home Sales came in at 495K vs. expectations of 500K but well above the previous reading of 468K.
None of this will move the market and the 1st resistance level is just 9 basis points above the current price at 103.48. The 2nd level of resistance at 103.7 is very strong because there are also 3 moving average numbers that are at or close to this mark. The biggest factor that is likely to keep the bonds from making any significant move upward is the growing belief that the Fed is going to start raising rates in December. With that in mind, lock now if you have a loan closing soon or if you decide to float, lock on any good upward movement in bond prices. The higher the rates go, the less a buyer can afford - contact me (801-853-8720 or 702-812-1214) if you would like my spreadsheet that calculates how buying power is eroded as rates increase or homes appreciate; I'm happy to share it with you. Make it a great day and a super fantastic Thanksgiving weekend.