While it will be interesting to see how Stocks fare next week, and if they will continue to slide lower – the week ahead also brings some potentially market moving economic reports. Existing Home Sales will be the headliner on Wednesday while Durable Goods Orders, weekly Initial Jobless Claims, and New Home Sales will arrive on Thursday. If the news of the week is very negative for the economy, Bond prices could move higher still and bring more improvement to home loan rates.
Remembering that home loan rates improve when Bond prices move higher, the chart also shows some encouraging “floors of support”, just underfoot where Bonds are trading right now, which should help them hold their current ground and perhaps even improve. But if the Stock market rallies and reverses course to move higher, this could quickly cause Bonds and home loan rates to worsen.
Patrick Dunn, Westwood Mortgage Inc. & MMG Weekly
patrick@westwoodmortgage.com / http://www.certifiedplanning.com/