The "At A Glance" section will follow shortly, but for now, we have to focus on strategies for dealing with the "tape bomb" we received this morning.
Durable Goods came out more than significantly higher than expected. It was one of the biggest margins of discrepancy between "consensus" and "actual" in last several years. A drastic deviation from consensus or an unexpected news item is a "tape bomb." It's just exploded so how do we deal with it?
First of all, if you have a short time horizon on ordering docs (tuesday or sooner), and you have access to 24 hour lock ability, it's probably safer to play this conservatively and lock now.
If you will be waiting for rate sheets to come out, then all we can do is reassess when they get here. More direction for the trading day will come at 10AM EST with the release of Consumer Sentiment and New Home Sales. We won't really know until then if the situation is dire enough to lock today, or if the curve looks like it will be healthy enough to let it ride through the weekend.
Between now and rate sheets, momentum will be important. If the curve were to freeze and just move sideways, pricing actually would not be any worse than yesterday's. But certain lenders will play this differently. If do decide to lock, shopping pays off today, but again, we'll have to wait for 10AM and reassess.
From the close yesterday, we're down .375 YSP, but not every lender will have priced in all of yesterday's improvements, so we will see some lenders .375 worse, some higher, some lower.