Mortgage rates rebound as investors shrug off flesh wound 🗡️🩸📉
The Week Ahead
WEEK AHEAD 🗓️
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After rising sharply following the Fed’s October 28 rate cut, and peaking 69 basis points above the October low, mortgage rate prices remained in a sideways pattern earlier in November but slowly recovered most of the losses in the final two weeks.
This past week the Chicago Business PMI, which emphasizes the manufacturing sector, had one of its worst results since Covid.
The Chicago PMI at or below 45 has only occurred during a recession or immediately before. Since its inception in 1967, the latest 36.3 reading is already lower than the starting point for all 7 previous recessions.
Meanwhile, the employment portion of the index fell to the lowest level since May 2009 – none of the PMI survey respondents reported that they added new jobs.
Markets shrugged it off, perhaps because of holiday distractions, or maybe because they are waiting for further confirmation from the more heavily weighted Institute for Supply Management PMI survey on Monday.
Jerome Powell also has a scheduled speech Monday afternoon.
Midweek we get service sector PMI surveys and November auto sales, which is an industry under careful watch after subprime auto lender Tricolor, and auto parts maker First Brands, both filed for bankruptcy last quarter.
Finally, on Friday the latest PCE report is expected.
The Personal Consumption Expenditures is the Fed’s preferred gauge of inflation - the PCE data, along with Jerome’s Monday comments, could help provide some much-desired clarity surrounding next week’s FOMC rate decision.
Monday I will take a deeper look at how mortgage rate prices, bond spreads, and longer-term trends are unfolding in my Mortgage Rate Data Deluge.
The latest Lock-O-Meter risk scores and rate lock recommendations will be posted with it.
Thanks for reading.
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