Market Analysis

Below is Larry Baer with Market Alert's commentary for today:

Larry Baer:

Treading water.

There is nothing in the way of economic data for mortgage investors to trade off of today - so these investors will take directional cues for mortgage interest rates from trading action in the stock markets. Rising stock prices tend to drag mortgage interest rates higher while falling stock prices are generally supportive of steady to perhaps fractionally lower mortgage rates.

In my opinion -- if mortgage interest rates are going to muster a rally of any significance this week -- the rally won't likely occur before Friday's release of the January nonfarm payroll data (8:30 a.m. ET). A growing number of analysts are suggesting the headline jobs report will show the economy added more than 20,000 jobs than it lost last month. While such a number will be a definite positive for the prospects of further economic recovery - it will almost certainly serve to put additional upward pressure on mortgage interest rates as capital sources see an opportunity to demand a higher yield for their available investment dollars.

In the convoluted world of the mortgage market lousy jobs reports tend to be supportive of steady to perhaps fractionally lower rates. This time around it will likely take a surprisingly dismal jobs report showing a loss of 15,000 or more jobs together with a national unemployment rate exceeding 10.1% to power a notable move to lower mortgage interest rates. While such an outcome is certainly possible - it does not appear to be very probable.