After a long weekend and honoring the people who gave the ultimate price for our freedom; it was back to work. And what a great day or bad day, depending on how you look at it.
You have probably heard me say, especially if you got a mortgage with me, that we pray for a stock market crash so that we can get a great interest rate then pray for the market to recover. We got just that out of the gate this week.
Tuesday the markets reacted to Spain ousting a leader, Italy looked like they may have separatists in power (like the Brexit movement), and therefore Europe’s possible economic instability and more talks of tariffs. Then there is the US’s on-again off-again talked with North Korea.
The Dow Jones lost a little over 400 points and the bond market gained 21 basis points. so interest rates went down .125-.25% in one day. But I also always warn people, this is a big swing in a day, and most likely will swing back, so lock-in your rate when we have such a “great” event in the mortgage market.
Sure enough the next day the stock market recovered and the bond market lost it’s gains making rates go back up a little. So those lower rates vanished.
Now for actual economic news:
Thursday the personal Income in the US was up 0.3% and spending was up 0.6% with “core” PCE up 0.2% Friday the May payroll number (JOBS JOBS JOBS) was up 223,000 with the jobless rate dropping to 3.8% and average hourly earnings up 0.3% – all this way too happy-news for the mortgage market.
So though it was light data, it had a big impact on rates.