Market Snapshot

Tuesday's bond market has opened fairly flat after this morning's economic data gave us mixed results, but has since made steady gains. The stock markets are giving back some of yesterday's gains with the Dow down 17 points and the Nasdaq down 7 points. The bond market is currently up 25 basis points.  Rates were slightly off of yesterday's close when rates were initially posted at 11:00 AM, but because of the improving bond market we have improved discount points by .25%. To put that in perspective, both the 30 year and 15 year fixed rates are below the Freddie Mac Histic Lows set earlier in the year.

Today's Mortgage Market News

This morning's release of the 3rd Quarter Gross Domestic Product (GDP) revision revealed a downward revision, as expected. It revealed a 2.8% annual rate of growth during the third quarter that nearly matched forecasts. This means that the economy did not grow as much during the 3rd quarter than previously thought. That is good news for bonds and mortgage rates, but since the 2.8% increase was nearly what analysts had predicted, the impact on this morning's trading and mortgage pricing has been minimal.

November's Consumer Confidence Index (CCI) was posted late this morning, showing a reading of 49.5. This was higher than forecasts were calling for, indicating that consumers were more optimistic about their own financial situations than many had thought. That is considered negative news for bonds because rising confidence means consumers are more apt to make large purchases in the near future, effectively fueling economic growth.

We have two more events to watch for later today. The first are the results of the 5-year Note auction being held today. They will be posted at 1:00 PM ET. If there was a strong demand from investors, we could see bond prices rise and mortgage rates fall this afternoon. But a lackluster interest in the sale could lead to higher mortgage pricing.

The FOMC minutes may be a major mover of the markets or a non-factor, depending on what they say. The key will be concerns over inflation and the Fed's next move. If the Fed members were concerned about inflationary pressures and overly optimistic about economic growth, we may see the bond market move lower and mortgage rates higher after they are released at 2:00 PM ET.

There are four reports scheduled for release tomorrow morning. October's Durable Goods Orders is the first and will be posted early morning. This data helps us measure manufacturing strength by tracking orders for big-ticket items, but is known to be quite volatile from month-to-month. It is expected to show a 0.5% increase in new orders. A smaller than expected rise would be considered good news for the bond market and mortgage rates.