Daily Commentary by Larry Baer: With no major economic data on tap the trend trajectory of mortgage interest rates will likely be most strongly influenced by trading action in the stock market during this holiday shortened trading day. Higher stock prices will tend to drag mortgage interest rates higher while falling stock prices will probably prove supportive of steady to perhaps fractionally lower mortgage interest rates.
Looking ahead to next week the first three trading days will see mortgage investors reacting to the Institute of Supply Management's December Manufacturing Index on Tuesday followed by the November Factory Orders on Wednesday and the tandem of weekly jobless claims and the Institute of Supply Management's Service Sector Index on Thursday. All four reports are expected to be mortgage market neutral. Things heat up on Friday with the release of the December Nonfarm Payroll figures. Most analysts anticipate the economy created 150,000 more jobs than it lost during the last month of the year while the national jobless rate tick higher to 8.7% from 8.6% as more job seekers returned to the labor market. If the actual numbers closely approximate the consensus estimate look for mortgage interest rates to remain essentially unchanged. A headline number of 165,000 or more and/or a national jobless rate of 8.5% or less is likely to cause mortgage investors to react by pushing mortgage interest rates aggressively higher from current levels. While this latter outcome is certainly possible - at this juncture it does not appear very probable.
One last look back - and then it is on to the future. I wish you and yours a wonderful new year filled with abundance, joy, and treasured moments. May 2012 be your best year yet!
THE MARKET IS ALWAYS RIGHT! . YOU AND I ARE SOME OF THE TIME
