Tuesday's bond market has opened in negative territory despite weaker than expected economic news. The stock markets are contributing to the bond losses with early gains of 103 points in the Dow and 24 points in the Nasdaq. The bond market is currently down 4/32, but with yesterday's afternoon weakness we should see this morning's mortgage rates move higher.

The Conference Board released their Consumer Confidence Index (CCI) for December late this morning. It showed a reading of 38.0 that was much weaker than the 45.2 that was expected and was a new record low for the index. This indicates that consumers are less optimistic about their own financial situation than many had thought. That is actually good news for bonds, generally speaking, because consumers are less likely to make large purchases if they are concerned about their own financial situations.

The only data we will get tomorrow are weekly unemployment numbers from the Labor Department. They are expected to say that 575,000 new claims for unemployment benefits were filed last week. This would be a decline from the previous week's spike of 586,000. However, this data usually is not influential in setting mortgage rates unless it varies greatly from forecasts.

The bond market will close early tomorrow ahead of the New Year's Day holiday and will remain closed Thursday. The stock markets will also be closed Thursday.

The markets will reopen Friday morning along with the release of the Institute for Supply Management's (ISM) manufacturing index. This highly important index measures manufacturer sentiment. A reading below 50 means that more surveyed manufacturing executives felt that business worsened during the month than those who felt it had improved. Analysts are currently expecting to see a 35.4 reading in this month's release, meaning that sentiment fell from November's 36.2. A smaller reading will be good news for the bond market and mortgage shoppers while a higher than expected reading could lead to higher mortgage rates Friday morning.

                   Mel