Monday Market Update – 07/08/2019

Hope you had a great 4th of July Celebration spent with friends and family or you took time for yourself. We need to stop and remind ourselves that work, while important, is merely part of the overall equation of our lives. If we don’t step back to recharge and spend time with those we love, we may be missing the some of most important parts of life!

Is now a good time to buy? ABSOLUTELY! Inventory is building, rates are down to the lowest they’ve been on more than 31 months. Take advantage of this moment. Wondering what it might cost you to wait? Ask me, I’ll send you a report for your market and circumstances.

Looking to Refinance? Now could be a great time to consolidate debt, lower your payment or take cash out for renovation or tuition. More on that below. Contact me today to see how we can help!

Your weekly update begins here:

Stocks ended the day lower and Mortgage Bonds did too, gaining back much of their losses from Friday. It’s a relatively quiet economic news day but a busy week with the Fed in focus. Fed Chairman Jerome Powell will be speaking on Tuesday, Wednesday, and Thursday, and we will be getting the Fed Minutes from the June 19th Fed meeting on Wednesday. Additionally, the Consumer Price Index report will be released on Thursday and there will be a 10 and 30-year auction on Wednesday and Thursday respectively. The rest of the week looks something like this:

  • Tuesday: NFIB Small Business Optimism Index, Jerome Powell Speaks
  • Wednesday: Mortgage Applications, Jerome Powell Speaks,10-year Note Auction. Fed Minutes
  • Thursday: Consumer Price Index (CPI). Initial Jobless Claims, Jerome Powell Speaks,30-Year Bond Auction
  • Friday: Producer Price Index (PPI)

Housing Wire published an article that says that more than 8.2 million borrowers can now benefit from refinancing their mortgages, according to Black Night Financial. This is 1.5 million more than before the recent rate drop and the biggest number in almost 3 years. There are now almost 4.5 times more refinance candidates that there were in November 2018. Of the 8.2 million mortgages that can benefit, 35% of them were originated in 2018.

According to Black Night, borrowers who refinanced could reduce their mortgage by 0.75% with an average savings of $266 per month. Use our Refinance Comparison and Debt Consolidation calculators to show your clients the benefits of refinancing.

Mortgage Bonds are trading back above support at the 102.274 Fibonacci level. On Friday bonds broke beneath this level intraday and went all the way to the next support level at the 25-day Moving Average, before bouncing higher and closing directly beneath support at 102.274. Bonds now have a lot of room to the upside before hitting the next resistance level at 102.734.

The 10-year also broke above its ceiling at 2.032% before hitting the next resistance level at the 25-day Moving Average, before being pushed lower. This morning Yields opened slightly above the 2.032% ceiling but are now back beneath it and have room to improve. Begin the week carefully floating.

Stocks and Bonds were both lower at the end of last week, after a surprisingly strong Jobs Report. The Bureau of Labor Statistics (BLS) reported that there were 224.000 jobs created in the month of June, which was much stronger than the 160,000 expected. There were 11,000 in negative revision to the previous two months – April was revised lower by 8,000 and May was revised lower by 3,000.


The Unemployment Rate ticked up from 3.6% to 3.7%. Let’s look at why – There are two different surveys within the Jobs Report – The Business Survey, where the headline jobs figure is derived from, and the Household Survey, where the Unemployment Rate comes from. The Household Survey also has a job creation component, which said that there were 247,000 job losses. But there is another component that goes into the Unemployment rate- The labor force increased by 335,000, which is why the unemployment rate moved higher.

The all in “U6” Unemployment Rate, which includes total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, moved slightly higher from 7.1% to 7.2%. The labor force participation rate increased from 62.8% to 62.9%.

Average hourly earnings rose 3.1% year over year, which was unchanged from the previous report. Weekly earnings, which we focus on more, remained stable, up 2.8% year over year. Still no signs of inflation, as expected.

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