Mortgage Bond Market Analysis - Earnings Season Has Begun

Happy Tuesday and welcome to the start of earnings season.  After a great national championship game last night where Urban Meyer's Ohio State Buckeyes ran all over the Oregon Ducks, it's time to get back to reality and talk about the mortgage bond market.  There was little economic news to sink our teeth into but the two releases in consumer and business confidence came in higher than expected.  Additionally, the JOLTS number came in at 4.972 vs. 4.85 expected.  On the one hand, these numbers aren't important enough to have much of an impact on the bond market but on the other hand, confidence in the economy from consumers and businesses is negative for pricing (which translates into the possibility of investors selling off and rates increasing).

Earnings season is here. Every quarter, earnings season is kicked off with Alcoa's earnings announcement and the results were good which sent the stock market up strongly.  In spite of the confidence in the equity market, the benchmark bonds are not selling off like they typically would on a big up day in the stock market.  The FNMA benchmark bond has been positive and negative today but is at 0 right now while the GNMA benchmark bond is up 24 basis points as of this writing.  Here's this morning's chart:

On the docket for tomorrow is business inventories, retail sales and import prices.  These could have a slight impact on the market but the more important data releases will come on Thursday with the weekly jobless claims numbers in addition to the PPI and the Philly Fed Manufacturing survey.  There's more data on Friday but we'll address that later in the week.  As for now.  I'd lock if my loan was closing within 15 days and float with caution if it's closing between 15 and 30 days from now.

Please feel free to contact me if I can help with anything mortgage related - 702-812-1214.  If you want to make sure that you are staying current with what's going on in the interest rate market (AKA the mortgage bond market) then like The Wunderli Team facebook page or subscribe to the blog (I sometimes provide intraday updates on my facebook page).  Make it a great day.