5350 DTC Pkwy., Ste. 305, Greenwood Village, CO 80111
phone: 303-320-9767 | fax: 303-320-9766

5350 DTC Pkwy., Ste. 305, Greenwood Village, CO 80111
phone: 303-320-9767 | fax: 303-320-9766

Tuesday, October 27, 2020

Market Commentary

Updated on October 27, 2020 10:05:37 AM EDT

September’s Durable Goods Orders was posted at 8:30 AM ET this morning, revealing a 1.9% jump in new orders for items such as airplanes, appliances and electronics. This was a larger increase than 0.6% that was expected, but this data is known to be volatile from month to month. That means the variance in this data isn’t nearly as significant as it would be in other reports. Even a secondary reading that excludes larger and more costly transportation-related orders (i.e.-airplanes) came in stronger than predicted. Those increases give a sign of strength in the manufacturing sector that makes them bad news for bonds and mortgage rates.

Also posted this morning was Octobers Consumer Confidence Index (CCI) at 10:00 AM ET. The Conference Board announced a reading of 100.9 that was down from September’s revised 101.3 and weaker than expectations. The decline means surveyed consumers felt a little worse about their own financial situations than they did last month, which should translate into softer consumer spending that fuels the economy. Therefore, we can consider the data slightly favorable for mortgage rates.

Tomorrow doesn’t have any relevant economic data to be concerned with. However, it does have the first of this week’s two Treasury auctions that have the potential to influence mortgage rates. 5-year Notes are being auctioned tomorrow, followed by 7-year Notes Thursday. If these sales are met with a strong demand from investors, particularly tomorrow’s auction, bond prices may rise during afternoon trading. This could lead to improvements in mortgage rates shortly after the results of the sales are posted at 1:00 PM ET each day. A lackluster investor interest may create selling in the broader bond market and lead to slight upward revisions to mortgage rates.

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