Mortgage Rates Steady with Little Movement

So far today there has not been much movement in the bond and stock markets as it looks like everything is in a very tight range at 11:00AM.  The 10yr is up slightly to 2.57% and the MBSs are just in positive territory.

The data this morning was nothing that was anticipated and had little if any reaction when it was reported.  Holiday trading decreasing around the world (although Europe markets lower today).  The US DJIA trying to break the psychological 20K level.  We all know it is going to happen, but when?  Most expect equity markets to continue to increase right into Jan 20th when Trump is inaugurated - after that the debate will increase both ways about whether Trump can quickly deliver what markets expect. Any drag on tax cuts, fiscal spending, or reducing regulations that have piled up the last eight years will give investors pause.

Earlier this week Ray Dalio, the founder of the largest hedge fund, Bridgewater, commented “if this administration can spark a virtuous cycle in which people can make money, the move out of cash (that pays them virtually nothing) to risk-on investments could be huge.” He added “the question is whether this administration will be a) aggressive and thoughtful or b) aggressive and reckless…. “  I am pretty sure that it will not take long to find out.  I have stated this all along that I hope that this economy starts moving, but I do hope that we have not bet the farm and have a huge letdown. 

Went shopping the other day and could not believe the discounts and deals from retailers, and I also spent money on Amazon. Per DynamicAction, which analyzed $4B of ecommerce transactions orders using promotions in North America surged 131% year on year between November 1 and December 18 to account for more than half of all purchases. If holiday sales end up soft it should be a shock to retailers and consumer confidence.

The dollar weaker this morning but nothing material in it, as year-end is coming.  Movements in markets is normal as many investors begin closing down for the end of the year. Every day now trading volume will lessen, the norm into year-end but it does open the potential of price volatility if there are any shocks like stronger or weaker economic data or geo-political events.

Looking for mortgage rates to once again stay in a very tight range.  Low amount of economic information and low trading levels helping to keep mortgage rates in check.