Mortgage rates have improved modestly over the past couple days and are back down at the best levels of the year.
US stocks got hammered yesterday as the market grew concerned about the falling price of oil. Normally one would think lower gasoline prices would be god for the economy because it leaves more money in the household budget for other consumption. However, now that the US is so heavily invested in domestic production lower prices means lower profits for many US companies. When stocks do poorly mortgage rates often benefit.
As we’ve seen in the past the stock market often has a short memory. After posting the biggest one-day loss in over 2 months yesterday US stocks are rallying today on stronger than expected retail sales figures. The Commerce Department reported earlier today that sales at the retail level increased by .5% last month when you strip out cars. This was higher than economists had been expecting.
From a technical perspective mortgage-backed bonds appear vulnerable. I am going to shift to a locking position.
Current Outlook: locking