14 May Stocks Continue to Advance Higher
Stocks are up and mortgage high bonds are down to start the week. With the growth in the stock market continuing, bonds have a significant headwind that could prevent them from making any reasonable gains. With all moving averages now below current levels, stocks have room to continue to climb higher. This is not good news for mortgage interest rates which seemingly can’t catch a break lately.
This will be a slow week for scheduled economic reports, so the technical picture will heavily influence the directions of markets. Tomorrow we will receive an update on Retail Sales. The good news is that the market expects a strong report, so a miss could happen. However, with recent months showing low readings, we could see a “catch up” month where the figure grows by more than planned. That could hurt mortgage rates.
Mortgage bonds are currently trading in a wide range. It seems more likely for rates to worsen. As a result, we will maintain our locking bias.