October 2nd, 2009 10:58 AM by Mel Samick
Friday's bond market has opened relatively flat despite weaker than expected economic data. The stock markets initially opened well in negative territory but have since recovered a good portion of those losses. The Dow is currently down 12 points and the Nasdaq is down 5 points. The bond market is down 2/32, but we still should see an improvement in this morning's mortgage rates.The Labor Department gave us today's big news with the release of September's Employment report. They reported that the U.S. unemployment rate stood at 9.8% last month, as expected. However, the number of lost jobs was 263,000, exceeding forecasts of 180,000. The third important component of the report- average hourly earnings, did not rise as much as thought. Overall, this data is favorable to bonds, but we have not seen much buying this morning as it appears the recent rally may be running out of steam.
The second report came from the Commerce Department, who said that new orders at U.S. factories fell 0.8% in August. This was much lower than the 0.5% increase that was expected and indicates that the manufacturing sector is weaker than many had thought. That is also good news for bonds and mortgage rates, but the employment figures were much more important to the markets than this factory report. Therefore, its impact on trading has been minimal.Next week is pretty light in terms of economic reports, so look for the stock markets to influence trading and mortgage rates. Since the bond market has failed to rally around today's news, it may be time to take a conservative approach towards mortgage rates if still floating a rate with your lender