• Bad news takes rates down, and that’s good for mortgages and real estate.
  • Because purchasing managers are always looking ahead, surveys of purchasing managers’ index are an old and reliable indicator.
  • Today’s news might have produced a drop, but the gorilla of all financial news lies waiting on Friday morning: jobs and wages for December.
  • If jobs and wages are weak, then assumptions that the Fed will hike again will also weaken, and despite all the rates-up, rates-up headlines, mortgages might drop back into the threes.

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Today, the first business day of 2016, five events have conspired to bring chaos to interest-rate assumptions: China’s manufacturing PMI fell for the tenth-straight month, to 48.2; authorities shut China’s stock markets before the scheduled close after a 7 percent crash; conflict between Saudi Arabia and Iran has escalated; and the US ISM (Institute for Supply Management) manufacturing index unexpectedly tanked to 48.2.Confession and nomenclature ... first, my perpetual apology for seizing on negatives. Bad news takes rates down, and that’s good for mortgages and real estate -- so long as the news is anti-inflationary and not too bad for the economy.“PMI” translates as "purchasing managers’ index," surveys of them an old and reliable indicator, since purchasi...