Trade War Troubles Continue

The whirlwind of volatility continues once again today in both the stock and bond markets, as investors continue to digest news of a break down in the progress between the U.S. and China surrounding trade negotiations. Yesterday started with stocks falling sharply just to climb back and close only slightly lower than where they opened. We saw a similar pattern in the bond market, with mortgage rate pricing improving in the early trading hours just to end the day worse off than where it opened. This morning has started off in a similar fashion to yesterday, so the concern will be how the trading goes as the day wears on. If we see a repeat of yesterday, we could once again give up all gains in the bond market.

The trade war battle is beginning to lose credibility in the markets. We have times when investors believe that an agreement between the two countries has been reached, only to learn that talks have once again broken down a short time later. Stock investors have used the progress days to make significant advancements, while only giving up a smaller portion of the gains when talks break down. So overall, the trade talks have been extremely beneficial to stock investors. We will be watching the updates closely and will keep you posted as to the impacts they are having to mortgage interest rate pricing.

Although we are not able to suggest immediately locking, the trend of bond prices falling as the day wears on remains a great risk. With bond prices near the highs we’ve experienced in over a year, now is a great opportunity to lock.