Mortgage Rates Continue to Push Lower

Mortgage rates continued its push from yesterday following bond market gains in the overnight hours (Asian and European trading sessions). 

The JOLTS job openings this morning, a report that a lot of people do not really pay a lot of attention to, showed an historic number jobs available (6.044 mil). Yet it does not add up, more jobs available but unemployment down to 4.3%. JOLTS job hiring, however, decreased by 253,000 jobs to 5.1 million. That lowered the hiring rate to a one-year low of 3.5 percent from 3.6 percent in March. There are many aspects and data to analyze jobs and most do not square with reality. According to employers they cannot find qualified workers and the labor market is tight. Talk of workers not qualified seems to be permeating but still does not add up. The JOLTs report this morning suggests wage growth may not be as positive as has been expected. Consensus is rallying around the easy answer that the gap between job openings and hiring points to a growing skills mismatch. Likely a lot of the reason but not all of it.  I am not sure what the answer is yet, but it is not a simple one. Economists believe tightening labor market conditions could soon unleash a faster pace of wage growth. Wage gains have remained sluggish even as the unemployment rate has tumbled to a 16-year.  

Inflation low, not increasing; another not so good outlook for wages and consumer incomes. The decline in interest rates was not expected and has investors and analysts scratching to make sense of it. Gold increasing and that usually happen unless inflation begins to increase. Looks more and more like a simpler answer than markets are presently searching for.  Money getting very nervous over the Over-valued stock market and global tensions are increasing, although we tend to not take it too seriously anymore as far as media, politicians and Washington and New York are concerned. These kinds of incongruities are not unusual at tops and bottoms or when a sea change is about to occur.  The one thing that is not happening is an increase in market volatilities that usually occur when tops and bottoms approach.  

Nothing again tomorrow but MBA mortgage applications. Thursday the Comey testimony and next week the FOMC are where the interests lie. Tomorrow afternoon at 2:00 pm April consumer credit will be reported, which is expecting an increase -  the use of credit cards as a measure of consumer confidence.

Crude oil was lower this morning in very early trading but this afternoon the price increased ahead of tomorrow’s weekly crude inventory report. Gold now at this year’s high: $1295.60.

In summary, bonds continue to rally despite all indicators pointing toward a rate hike next week from the Fed.   I am finding most clients are leaning toward locking in the recent gains, especially the ones within 15 days of closing.   I feel if you can tolerate the risk, do such with caution. We do have Comey testifying on Thursday and that could get the markets moving.   Not sure how much his testimony can benefit bonds at this point.   I think if there was a smoking gun, it would be known already.