https://youtu.be/jIBKEmo8o58

Hi, Bill Bodnar here with the Mortgage Market Guide recap.

So, mortgage backed securities and the financial markets are reacting to the jobs report that came out today.

The headline number was a bit of a stinker, only 20,000 jobs created. That was well below expectations of 175,000 jobs. But when you took a closer look under the hood there were some upward revisions to the previous month, which was positive.

We also watched the longest one month decline in total unemployment. That number was over 8% and that dropped to 7.3%, so that was  a very positive sign. And then hourly earnings, something we've been watching very carefully, are rising steadily.  They rose by four-tenths, which is a big month increase, and that left year-over-year wages  at 3.4%.

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So, that's a great sign. That's the hottest wage gain in 10 years. That's a really positive sign.

We are watching bonds basically touching the same highs we were at the last time these  job reports came out.  We are at a level of resistance, but you can notice a little trend higher. Why? What was the catalyst for the bond market to kind of recover after the losses we had in the previous week?

And what we're seeing here is that ECB slashed their growth for the future, so they're showing growth coming in at 1.1%, where original forecasts were at  1.7%. And that's a significant down grade.

The other thing we are looking at as well is that inflation has been trending low. And inflation is the driver of interest rates. When inflation abroad gets depressed, we actually import it. It washes on to our shores. We're seeing yields across the globe compress--or come down.

And that is coming back to us and we're seeing the 10-year yield back at like a 2.65%, or so, and we're watching our bonds at one-year highs.

A couple of numbers that I would leave you with for the weekend: No.1 in order for the bond market to get better and see better rates, we are going to need to see prices break above this ceiling. This ceiling coincides with about 2.6% on the 10-year notes, so if you're tracking the 10-year note, we're looking at 2.6% on the 10 year note as a real level we need to bust below.

To see rates get much, much better. In the stock market, we're watching the S&P 500 closely right now. It's trading beneath its 280-day moving average at 2,750. We do not want to see that stay under 2,750 for long, because if it does, that could lead to more selling. And that money could find its way into the bond market, and we could see lower rates ahead.

So, all in all, an OK jobs report. The hourly earnings was very positive.  That's a great number for housing overall.

And one last thing I'll leave you this, we are watching--what we call- a golden cross--which happened  back in February. And that usually says, "That better prices are ahead.” And isn't it funny that we are testing the best levels of the year.

If we move a little bit higher, things will be even higher in the weeks ahead.