Will Rates, Stocks Continue Falling Friday?

What a day and week. Stocks are diving, bonds are rallying, and rates drop when bond prices rise like this. Today’s stock snapshot below says it all, and the accompanying Bloomberg wrap-up has the details. As for what it means for mortgage shoppers, I laid out those details yesterday.

Tomorrow’s July jobs report will determine if stocks and bonds/rates continue their trajectories or reverse course. Expectations range from 75-100k new payrolls created in July … this after June’s dismal report of 18k new payrolls. If this number is even close to expectations or better, stocks would regain some ground and rates would rise slightly as bonds sell. That’s my bet because the BLS uses data from before the time the DC debt circus triggered a slowdown, plus mortgage bonds are close to 1yr highs. Even if jobs hit expectations and rates rose a bit, rates would still hold new 2011 lows set this week. If I’m wrong and July jobs report is another downside surprise, rates and stocks will continue falling.