Daily Rate Lock Advisory

Indexes Affecting Rate Lock

High

Unknown

ISM Index (Institute for Supply Management)

Activities will begin late tomorrow morning when October's manufacturing index from the Institute for Supply Management (ISM) is released. This is part of the traditional new month batch of reports that are usually posted the first week of each month. The index measures sentiment about business conditions in the manufacturing sector. Tomorrow's report is expected to show a reading of 49.4, up a little from September's 49.1. A reading below 50 is considered a recessionary sign of weakness in the sector. Therefore, smaller than expected reading would be good news for bonds and mortgage rates.

Medium

Unknown

Fed Talk

Now that the FOMC meeting is behind us, the Fed speaking calendar is heating up. This week has many speeches scheduled, but two particular that list subjects related to the economy and/or monetary policy tomorrow and Tuesday should draw plenty of attention. Chairman Powell’s comments during his post-FOMC press conference last week raised the possibility that the Fed may not cut key rates at their December meeting. Some of this week’s speaking events could give individual opinions on the topic. Bond traders will be listening closely for any hints.

High

Unknown

ADP Employment

Wednesday has two reports that we will be watching, starting with the ADP private-sector employment report at 8:15 AM. The release is expected to show 25,000 new non-governmental jobs were added to the economy in October after a decline of 32,000 in September. The shutdown has prevented the release of both September and October’s Employment report from the government, meaning this version will take on more importance than it usually does. Good news for the bond market and mortgage rates would be another decline in payrolls, indicating weakness in the employment sector.

Medium

Unknown

ISM Service Index

The Institute for Supply Management (ISM) will release their non-manufacturing index (aka service index) at 10:00 AM ET Wednesday. This is the sister report of tomorrow's ISM manufacturing index with this version tracking business executive opinions on conditions in the service sector rather than manufacturing. It is expected to show a reading of 50.9 for October, up from September's 50.0 to signal stronger activity in the sector. Bad news for rates would be a larger increase since it would be a sign of economic strength.

Medium

Unknown

Univ of Mich Consumer Sentiment (Prelim)

November's preliminary reading of the University of Michigan's Index of Consumer Sentiment is the week's final relevant release. It is set to be posted at 10:00 AM ET Friday. The index gives us an indication of consumer willingness to spend by surveying consumers about confidence in their own financial situations. It is expected to show a reading of 54.0, up from October's final reading of 53.6. Favorable news for bonds would be a noticeably lower reading because waning sentiment means consumers are less optimistic about their own financial situations and are less likely to make large purchases in the near future. With consumer spending making up over two-thirds of our economy, any related data is watched closely. The lower the reading, the better the news for mortgage shoppers.

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Unknown

none

Overall, Wednesday looks to be the most important day for mortgage rates due to the two economic releases, but tomorrow’s ISM release can also cause a noticeable move in rates. The calmest day may be Thursday unless something unexpected happens. It would be prudent to keep an eye on the markets if still floating an interest rate and closing in the near future because they may get active without notice.

Rate Lock Advisory

Mortgage Rate Trend

Indexes Affecting Rate Lock

ISM Index (Institute for Supply Management)

Fed Talk

ADP Employment

ISM Service Index

Univ of Mich Consumer Sentiment (Prelim)

none

Float / Lock Recommendation