With nothing in the way of new macro-economic data to guide them, mortgage investors much decide whether to lock in some profits before the trading day comes to an end - or stick with the rally in hopes that it produces more upside gains before the early close for the Christmas Holiday next Thursday.
Look for trading action to become increasingly spasmodic as traders focus on making sure profits are safely registered "on-the-books" and as they put the final touches on their year-end positions. The likelihood that anyone will be aggressively adding large risk positions to their portfolio is small - limiting the potential for a notable move to yet lower mortgage interest rates before the New Year begins.
The few mortgage investors still at their desks next Tuesday will get a look at the final estimate of economic growth for the third-quarter. The majority of economists expect Q3 Gross Domestic Product will register a reading of 2.8% -- exactly matching the previous guesstimate. Tuesday also brings expectations for an improved pace of November existing home sales. The day starts off on Wednesday with the November Personal Income and Spending report. Contained within this data series is the Personal Consumption Expenditure Index, one of the Fed's favorite measure of inflation pressure at the consumer level. While both income and spending are expected to have edged a bit higher last month -- the pace of consumer inflation is expected to have posted a very modest, and mortgage market neutral gain of 0.1%. Wednesday's 10:00 a.m. release of the November New Home Sales and Thursday's initial weekly jobless claims and November durable goods orders numbers will likely draw as much investor attention/interest as a single snowflake in a blizzard. The mortgage market will close early at 2:00 p.m. ET on Thursday and will remain closed on Friday for the celebration of Christmas.
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