Labor reports will be front and center in the second half of the week.
• There will be manufacturing news via the ISM Index on Monday, followed by the ISM Services Index on Wednesday.
• The ADP National Employment Report will also be delivered on Wednesday.
• As usual, weekly Initial Jobless Claims will be released on Thursday.
• On Friday, the Jobs Report for September will be released, which includes Non-Farm Payrolls, the Unemployment Rate, Hourly Earnings and Average Work Week.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.
When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.
To go one step further, a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.
As you can see in the chart below, Mortgage Bonds were able to rebound in recent days. Home loan rates remain attractive.
Chart: Fannie Mae 4.0% Mortgage Bond (Friday Sep 28, 2018)
