Mortgage rates took a step higher so far this week following the stock market hitting record highs again yesterday. The stock market celebrated after Russian President Vladimir Putin softened his stance against the Ukraine. Not only did the stock market gain back all it lost when the battle first brewed, but it far surpassed where it was before tension escalated. This is further proof that the complex investment markets often react beyond reason and functions based on the current hype vs. economic realities.
The ADP Employment Report was released this morning, showing a soft figure of 139,000 new job creations. While the expectation was only for 150,000, combined with the downward revision of 48,000 from last month’s report, this shows a continued weakness in the job market. The big report will be on Friday when the BLS (Bureau of Labor Statistics) is set to release their report for the month of February. This is the primary report the market follows and more heavily weighs into investors’ reading into the job market.
We are hopeful that today we will regain at least a little of what was lost yesterday. However, we don’t anticipate a significant improvement, as most bond traders will be waiting until after Friday’s BLS report before making big bets on the market. Therefore, with limited gains at best, we will continue with our locking bias.