All eyes and ears were on the nonfarm payroll report for October as well as the Unemployment figure. Last Friday, the Commerce Department reported the Unemployment Rate fell from 5.9% to 5.8% while there were 214,000 new jobs created. Just 5,000 of those were government jobs. As the number was still above 200,000, the actual figure was below economist’s expectations. The anticipated count was closer to 230,000.
The stock markets performed well last week with both the Dow and S&P hitting records. Mortgage rates which typically run in reverse of stock market trends reacted but not as much as one might expect. According to Freddie Mac’s weekly mortgage survey, the 30 year fixed rate rose back above the 4.00% mark for the first time in four weeks albeit slightly so. The 30 year fixed rate hit 4.02% from 3.98% while the 15 year fixed note rose a bit more from 3.13% to 3.21%. The 1-Yr ARM grew by two basis points to 2.45%.
Trading will be interrupted on Tuesday due to Veteran’s Day while economic reports will be fewer in number, especially compared to last week. There should be no big surprises with perhaps the most important number coming out is Friday’s Retail Sales tally.
The Fed has fully stopped its rate-reducing program called QE3, and did not indicate a re-introduction. Mortgage rates have reacted rather calmly, surprisingly. Rates didn’t even move at the Fed’s announcement that they could raise short-term rates sooner than expected. That said, given markets in Asia and Europe, it appears most bond investors will be keeping their funds in U.S. Treasuries and mortgage bonds instead of any foreign bond holdings, keeping U.S. mortgage rates near relative lows.