Friday's bond market has opened in negative territory as yesterday afternoon's selling extends into this morning's trading. The stock markets are mixed with the Dow down 25 points and the Nasdaq up 17 points. The bond market is currently down 6/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point.
Today's economic data came in favorable for the most part, but one the more important reports we see each month showed stronger than expected results. The bad news came in the Commerce Department's Retail Sales report for September that measures consumer spending. It showed a 0.6% increase in retail levels sales, exceeding analysts' forecast of a 0.4% rise. Today's release also revised sales from up 0.4% to up 0.7%, indicating that consumers spent more in August and September than many had thought. This is bad news for the bond market and mortgage rates because consumer spending makes up two-thirds of t he U.S. economy. Consumers spending more money each month fuels economic growth that makes long-term securities such as mortgage bonds less attractive to investors.