Strong earnings from Apple, American Express, Microsoft and Boeing helped to keep markets in balance last week after reports of weak business spending and poor housing data (again). The available data doesn't seem to match corporate earnings reports and that is giving investors fits.
Mortgage rates bounced around last week on the lack of conviction from the markets.
The uncertainty may be resolved this week, though, after several major events make their way through trading circles.
The first major event is the Federal Open Market Committee's two-day meeting, beginning October 30-31.
The FOMC meets eight times annually and, at its last meeting, the FOMC voted to lower the Fed Funds Rate by 0.500% to 4.750%. When this happened, mortgage rates briefly dipped, and then soared.
As of today, markets are predicting another decrease, but are unsure of how large the decrease will be. If you are currently floating your mortgage rate, or shopping for a mortgage, you'll likely have much different pricing prior to the Fed's meeting than after it so be aware.
Then, on Thursday, the next major event hits: the Personal Consumption Expenditures. This is the Fed's preferred inflationary gauge and PCE is expected to show a 1.7% increase. If the number comes in hotter than expected, though, the dollar should weaken on inflation concerns, thereby causing mortgage rates to rise.
And, lastly, on Friday we'll get October's employment report.
It's expected that the economy added 90,000 jobs in October and that the unemployment rate held flat at 4.7%. Each month, this data point is a huge market mover because more working Americans means that more Americans can afford to consume goods. More consumption pushes the economy forward so as we head into the Holiday Shopping season, the employment data should impact Retail Sales for October, November and December.
It's a busy week, everyone, and mortgage rates could be very different from day-to-day. If your rate looks good today, perhaps you should consider locking it.
