Friday’s bond market has opened in negative territory to extend losses from another afternoon of ugliness yesterday. Stocks are mixed with the Dow up 90 points and the Nasdaq down 38 points. The bond market is currently down 3/32 (5.21%), but day two of this week’s afternoon sell-off is going to cause this morning’s mortgage rates to be significantly higher than Thursday’s early pricing. This morning’s rates should be somewhere between .750 of a discount point and a full point higher than yesterday’s morning rates.

There were no major headlines yesterday that specifically caused the sell-off. Rhetoric between the U.S. and Iran was in the news and oil prices moved higher, but this scenario is fairly common these days. The most likely reason for yesterday’s weakness is just simply a negative attitude about holding long-term securities in the current environment where geopolitical tension remains high, as do inflation concerns. The real question is whether we will see another dark afternoon of selling or if bonds can find some support where yields are currently to bring buyers in. There is no particular reason to expect another afternoon of bond selling other than the past two days it happened. However, it would be prudent to keep an eye the markets if still floating an interest rate.

August's Durable Goods Orders report was posted at 8:30 AM ET this morning, revealing new orders for big-ticket products were unchanged from July’s level. Analysts were expecting to see a decline of 0.4%, meaning the headline number was stronger than predicted. However, a secondary reading that excludes the more costly airplane and other transportation related orders fell short of forecasts. With the headline reading unfavorable and the secondary being good news for rates, along with the fact this data is known to be volatile from month to month, we are labeling the report neutral for mortgage rates.

Also coming this morning was the University of Michigan's revised September Index of Consumer Sentiment at 10:00 AM ET. They announced a reading of 48.1 that was lower than the initial reading of 51.7, but a bit higher than the 47.8 that was the consensus. Waning confidence is good news for bonds and mortgage rates because slower consumer spending makes broader economic growth less likely since that category makes up over two-thirds of the U.S. economy. While we can consider this report to be slightly favorable for bonds and mortgage rates, it has not had a clear impact on this morning’s pricing. Traders are more focused on global metrics today than this moderately relevant economic data.

Next week starts light with nothing of importance scheduled for release. That will leave weekend headlines from the Middle East as the likely force behind a change in rates Monday. Every other day of the week has at least one scheduled report that we will be watching, but the last three days each have multiple reports set for release and include highly influential data. Those particularly important reports include the Fed’s preferred inflation gauges, a closely-watched manufacturing report and the almighty monthly governmental Employment report. There is enough importance in next week’s data to recover some of this week’s heavy bond losses and rate increases. Although, that same influence can fuel more bond selling and another leg upward for rates if they reveal stronger inflation and/or economic growth. Look for details on all of next week’s activities in Sunday evening’s weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.