Friday’s bond market is in negative territory again due to early stock gains and stronger than expected economic news. The Dow is currently up 88 points and the Nasdaq 17 points. The bond market is currently down 9/32, pushing the yield on the benchmark 10-year Treasury Note to 3.20%. This will likely push this morning’s mortgage rates higher by another .125 – .250 of a discount point.
There were two relevant economic reports posted this morning, both during late morning hours. The first was the University of Michigan’s revised Index of Consumer Sentiment for June. They announced a reading of 71.5 that was slightly lower than forecasts. That means consumers were a little less confident about their own financial situations this month than previously thought, making it favorable data for bonds and mortgage rates. However, this is was not enough of a variance to influence this morning’s mortgage pricing.
There were two relevant economic reports posted this morning, both during late morning hours. The first was the University of Michigan’s revised Index of Consumer Sentiment for June. They announced a reading of 71.5 that was slightly lower than forecasts. That means consumers were a little less confident about their own financial situations this month than previously thought, making it favorable data for bonds and mortgage rates. However, this is was not enough of a variance to influence this morning’s mortgage pricing.
The other came from the Institute of Supply Management (ISM), who said that their manufacturing index for June unexpectedly rose to 55.3 this month. That was well above forecasts of 51.1 and higher than last month’s 53.5 reading. This indicates that more manufacturers felt business improved during the month than last month, translating into stronger manufacturing activity. Therefore, this data should be considered negative for bonds and mortgage rates.
Monday is July 4th and all U.S. financial markets will be closed in observance of the holiday. There is no early close for the bond market or stock markets this afternoon, but it will probably be light trading the last couple of hours as traders head home for the long weekend. This could lead to additional volatility in bonds as investors look to protect themselves over the long holiday.
Next week is pretty light in terms of the number of economic reports scheduled to be posted, but one of the few is the almighty monthly Employment report next Friday. May’s Factory Orders data is set to be posted Tuesday morning, however, it is not considered to be one of the more important reports we see each month.