Mortgage Rates to Move Higher Initially, July 27, 2010

Mortgage Rate Trend Direction:     Neutral/Higher

Economic Reports/Rate Impact:    Consumer Confidence, 10:00 AM ET, Moderate Rate Impact

Key News:                                           US comapnies earnings

Summary

The US stock market appears to be heading for a positive opening this morning.  Good earnings reports from FedEx yesterday and DuPont this morning are setting the positive mood.  Also this morning a positve report on home prices has provided some confidence.  Speaking of confidence, the monthly report on Consumer Confidence is expected at 10:00 AM ET.  Expectations are for a drop in the ratings by consumers relative to their feelings about the economy.  However, this is not a surprise.  Given the modestly positive news, mortgage rates are likely to start the morning today neutral to higher from yesterday's closing position.

Impact of economic reports

An unofficial report, the Standard & Poor's/Case-Shiller Home Price Index showed and increase in average home prices in its 20-city survey area.  While the increase was modest, it demonstrates a stabilization in home prices that is a positive sign for the economy.  The Consumer Confidence figures are anticipated to show another drop in consumer's confidence regarding the direction of the economy and it's impact on them.  Unless the figures are dramatically different than expectations, the report will not likely impact mortgage rates today.

A host of US companies reported earnings this morning.  Most of the news was positive.  After the close of markets today another group of companies will report.  Railroad firm, Norfolk Southern will be watched closely out of this group as railroad traffic is a good indicator of economic strength or weakness.

Impact of international or political events

No international or political events appear likely to move markets today.  Of course developments during the day can, and often, do move the markets and mortgage rates.