Mortgage Interest rate update for Dallas Texas October 26 2018.   Current Mortgage Rate Trend Direction:  Modestly higher

Advise for Clients for mortgage rate lock: Continue floating as Stocks endure pain, for now

Disappointing earnings from Google and Amazon are pushing Stocks lower again this morning, while giving Bonds a boost higher.

Today’s drop in Stocks comes after yesterday’s 400-point gain for the Dow as the extreme volatility continues in the equity markets.

The first read on Q3 GDP rose 3.5% versus the 3.3% though down from the 4.2% seen in Q2 – but still very strong – leaving the year over year rate at 3.00%. So, the U.S. economy is running above “ideal” levels.  Within the report it revealed that consumer spending rose 4%, the strongest since the fourth quarter of 2014. Inflation measures within GDP declined. The PCE price index rose 1.6%, down from 2% in Q2. There was slowdown in business and residential investments.

The Fed will have to take the lower inflation into account when making interest policy in the coming months.  The Fed’s favorite inflation gauge, the annual Core PCE (2%), will be released Monday.

The yield on the 10-year T Note has declined to 3.08% from yesterday’s close of 3.13% and below support at 3.12% for now.

Technically, the Bond is comfortably above support at $100. Advise floating but be aware that sentiment can quickly turn negative in this volatile environment.

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