MARKET NEWS

Tuesday's bond market has opened in negative territory again, keeping in pace with the recent daily pattern of early weakness then afternoon strength. The stock markets are showing minor gains with the Dow up 26 points and the Nasdaq up 1 point. The bond market is currently down 7/32, but due to strength late yesterday, we will likely see little change in this morning's mortgage rates.

There is no relevant economic data scheduled for release today. The stock markets are watching overseas news with nothing to fuel buying or selling. S&P's warning of a potential downgrade of European debt if drastic measures aren't taken soon did cause some concern. However, it appears that stock traders are content in a holding pattern for the day. This means that bond prices should follow suit. Although, the daily trend of afternoon strength in mortgage bonds has not followed afternoon stock patterns. In other words, there hasn't been much to justify bonds moving higher into afternoon trading the past week or so, so there really is no reason to believe that we won't see it again today.

Worth noting on the recent bond trend is that we really haven't seen a noticeable net improvement in mortgage rates over that time frame. We haven't lost much ground either though. The regular buying on negative days is a clear sign of strength in my opinion. However, it has rarely been followed by a strong opening the next morning. It almost seems that investors want mortgage bonds to remain near current levels. But, we should not get complacent in regards to mortgage pricing as this type of activity could mean we are about to see a sizable move up or down in rates in the near future.

We don't have any relevant economic news to be concerned with until possibly Thursday morning when we get weekly unemployment figures from the Labor Department. There are two monthly reports scheduled for release Friday morning, but neither is considered to be highly important. This could mean that we are in for a fairly quiet couple of days for mortgage rates unless we see a sizable rally or sell-off in stocks.