23 Dec A Slow Week for Mortgage Bond Activity
As we head into Christmas week, we can expect volume in both the stock and bond markets to be much lower than normal. In times of low volume, we can see more exaggerated swings due to a lack of counter buying / selling. With many large investors already on vacation, there may not be a strong market of buyers to take advantage of opportunities to purchase bonds when the prices drop. That tends to add upward pressure to mortgage interest rates. The bond market will be closing early tomorrow and will be closed on Christmas. So don’t anticipate much to happen this week.
Reports on the economy today have been mixed. Most importantly, Durable Good Orders came in weaker than anticipated. This is not an encouraging sign as we head into the holiday shopping spree. However, it may show that husbands have realized that washing machines and dryers aren’t real Christmas presents. So maybe we will see retail sales from jewelry stores make up for the slumping Durable Goods orders.
Mortgage bond prices remain weak. We will stay with our locking bias.