• 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.

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.

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