Daily Rate Lock Advisory

Indexes Affecting Rate Lock

Medium

Positive

Consumer Confidence Index

Today’s only relevant economic data was the release of September's Consumer Confidence Index (CCI) at 10:00 AM ET. The Conference Board announced a reading of 81.9 for this month, falling sharply from August’s 88.6. This was also noticeably lower than expectations, indicating consumers felt much better about their own financial situations last month than they do this month. Since waning confidence often translates into slower consumer spending, we can label the report good news for bonds and mortgage rates. Unfortunately, bond traders remain cautious about the Middle East and other factors, preventing them from reacting to this moderately important piece of data.

Medium

Unknown

ADP Employment

Tomorrow’s data increases in importance. We have three reports for the markets to digest tomorrow with one of them carrying a label of highly important. First will be September's ADP Employment report at 8:15 AM ET. This report tracks changes in private-sector jobs, using ADP's payroll processing clients as a base. However, it is not accurate in predicting results of the much more influential monthly government report that follows a couple days later. Still, because we have seen noticeable reactions to the report at times, it is on our calendar. Forecasts show approximately 69,000 new payrolls were added to the economy. Good news for mortgage rates would be a much lower number.

High

Unknown

Personal Income and Outlays

The report likely to draw the most attention tomorrow is August’s Personal Income and Outlays data at 8:30 AM ET. It will give us an indication of consumer ability to spend and current spending activity. The theory is, if consumer income is rising, they have more money to spend each month. Analysts are expecting to see a 0.4% rise in income while spending rose 0.8% during the month. This report also includes important inflation readings that the Fed relies on during their FOMC meetings (PCE). The overall PCE is expected to show a 0.4% increase while the more important core PCE that excludes more volatile food and energy costs is predicted to rise 0.3%. Since rising inflation erodes the value of a bond's future fixed interest payments and causes the Fed to raise key short-term interest rates, stronger than expected readings would likely lead to higher mortgage rates tomorrow morning.

Low

Unknown

GDP Rev 2 (month after Rev 1)

Also set for release early tomorrow morning is the second revision to the 2nd Quarter Gross Domestic Product (GDP) reading. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best measurement of economic growth or contraction. However, this data is quite aged now (covers April through June) and will likely have little impact on the bond market or mortgage pricing unless it varies greatly from previous readings. Market participants are looking more towards next month's release of the current quarter's initial GDP reading. A large upward revision from the previous estimate of 1.5% would be considered negative for rates as it means the economy was stronger than thought.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

Consumer Confidence Index

ADP Employment

Personal Income and Outlays

GDP Rev 2 (month after Rev 1)

Float / Lock Recommendation