Today's market update and our strategy going into the jobs report.

Well, I was right. Sort of.

The Jobs Report was bad news today....Jobs lost in August came in higher than expected. 84,000 actual compared to 75,000 expected. Unemployment soared more than anyone though it would, 5.7% up to 6.1%. This had our mortgage backed securities well up on the day and still above the 200dma. However, the afternoon led to some profit taking and a sell off of bonds and a rush into stocks in spite of the news by 'bargain hunters'. (Remember, the dow closed down 300+ points yesterday and was around 11,000 so stocks were on sale today to say the least.) This profit taking and stock market sale forced bonds downward and we closed the 6% fnma mbs at $101.47, down 19 basis points. That resulted in a reprice for the worse this afternoon by almost all lenders. (Several actually popped rates up twice today.) Moving forward though, the news we got today on the jobs was worse than even the above numbers would indicate. June and July were revised and were revised for the worse, increasing the loss by 60,000 jobs from 100,000 to 160,000. The dow was down triple digits on the news and the bargain hunters late in the day helped the rally to end the day with the Dow up 18 points to close at 11,207. The NASDAQ fell 3 points to close at 2,255 and the broader S&P 500 Index added 5 points to it's day closing at 1,242.

I believe that my suggestion was and still is correct that today (unless you locked early) was not the day to lock. Next week there are only two potential "High Impact Reports" due out, both of those are next Friday with retail sales and retail sales ex-auto. That means that the bond market should take it's cues from stocks barring any insanity and the significance of today's jobs report will start to sink in. A rally in the bond market early in the week wouldn't by any stretch shock me. Let's keep things"as is" if you didn't already lock and see where we end up. We should head higher (meaning lower on the rates of course) by mid week. However, talk to your mortgage professional and if you are happy and comfortable with the rate that is on the table right now, take it. There is nothing wrong with security and you'll be happier in the long run if you have control over the situation.

Let me know if you have questions and I hope this information was useful.