MARKET NEWS

Thursday's bond market has opened in positive territory again following early stock losses. The stock markets are showing moderate losses during morning trading with the Dow down 54 points and the Nasdaq down 13 points. The bond market is currently up 5/32, which with yesterday's afternoon improvements should lower this morning's mortgage rates by approximately .125 - .250 of a discount point.

The Labor Department said early this morning that 381,000 new claims for unemployment benefits were filed last week. This was a pretty good sized drop from the previous week's revised total of 404,000 new claims, indicating employment sector strength and making the data negative for bonds. Fortunately though, the markets don't seem to be too impressed or concerned about the news as it appears this morning's bond gains are based on stock losses.

Tomorrow has the week's two remaining economic reports scheduled, but neither is considered to be highly important to the markets or mortgage rates. The first is October's Goods and Services Trade Balance report at 8:30 AM ET. This report gives us the size of the U.S. trade deficit, but it is considered to be of low importance to mortgage rates. It is expected to show a $44.0 billion trade deficit. Unless it varies greatly from forecasts, I don't expect this data to affect mortgage pricing.

Also tomorrow is the release of December's preliminary reading to the University of Michigan's Index of Consumer Sentiment. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates slightly. Consumer sentiment or confidence is tracked because the more comfortable consumers are about their own financial situations, the more likely they are to make a large purchase in the near future. Since consumer spending makes up two-thirds of the economy, any related data is watched closely. Tomorrow's release is expected to show a reading of 65.1, which would be an increase from last month's final reading. A decline in confidence would be considered good news for the bond market and mortgage rates.