Commentary: The number of Americans standing in line to file first-time claims for government jobless benefits unexpectedly rose by 9,000 to 429,000 during the week ending June 18th -- according to Labor Department figures released earlier this morning. The latest gain in this statistic is viewed by most mortgage investors as further evidence the economic recovery has lost momentum in recent months. Claims had been as low as 385,000 in early April. A slowing economy reduces the demand for capital - which in turn reduces interest rates. Rising initial weekly jobless claims tends to be good news for the prospects for lower interest rates - but bad news for the prospects of a surge in the number of homebuyers active in the market place.
Speaking of homebuyers - the Commerce Department reported this morning that the pace of new home sales fell 2.1% on a month-over-month basis. Mortgage investors had actually been anticipating new home sales would be softer last month - so the decline was already well priced into your rate sheets.
Trading action in the stock markets will probably prove to be the primary driver behind changes in the trend trajectory of mortgage interest rates for the balance of the week. Lower stock prices will likely prove supportive of steady to perhaps fractionally lower rates while higher stock prices will probably drag mortgage interest rates higher.
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
