Mid-Week Strategies for Mortgage Professionals: What You Can Learn from Market Trends

In the world of mortgage lending, timing is crucial. Understanding market movements can make the difference between locking in a favorable rate or getting caught in volatility. A recent article by Jessica Menton from 彭博资讯 , “Trump Tariff Spat Has Stock Dip Buyers Obsessed with Wednesdays,” highlights an interesting trend in the S&P 500: Wednesdays have emerged as the best day to buy the dip, with strong mid-week performance.

This got me thinking: what can mortgage professionals learn from this? Specifically, how can we apply this knowledge to improve lock strategies for UMBS 30YR 6% and provide more targeted advice to clients?

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What We Can Learn from Stock and Bond Market Trends

The S&P 500 data shows a strong correlation between Wednesday and better performance, aligning with what we see in the UMBS 30YR 6% market. After analyzing the data for 2025 YTD UMBS performance by day of the week, here’s what we know:

• Wednesdays show the strongest average performance for UMBS 30YR 6%, with an average gain of 6.4 bps.
• Fridays exhibit the weakest performance, with an average loss of 13.5 bps.
• Mondays are also a slow start to the week, showing a -8.9 bps loss on average.
• Tuesdays and Thursdays generally show moderate performance, with Tuesdays averaging +2.1 bps.

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What Does This Mean for Mortgage Professionals?

Given the data, here's what we can advise mortgage professionals for 2025 loan locking strategies:

1. Lock on Wednesdays: As both the S&P 500 and UMBS 30YR 6% show strength on Wednesdays, this is likely the best day for locking in loans. The positive movement in both markets suggests a favorable mid-week trend.
2. Avoid Fridays for Locks: With Fridays showing consistent weakness in both markets, it’s wise to lock earlier in the week. The volatility heading into the weekend could expose your loans to negative market fluctuations.
3. Monday and Early Week Weakness: With Mondays showing an average loss, it’s better to hold off on locking loans until mid-week. The market may not fully stabilize until Tuesday or Wednesday.
4. Mid-Week (Tuesday to Thursday): If you miss locking on Wednesday, Tuesday and Thursday are still decent options, though not as strong as Wednesday. These days provide moderate returns but come with less risk than Friday.

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A Broader Market Insight: Positive Stock-Bond Correlation

Something else to consider is the unusual trend of positive correlations between stocks and bonds observed recently. Typically, stocks and bonds move in opposite directions—when stocks go down, bonds go up, and vice versa. However, recent economic pressures, such as inflation and interest rate hikes, have led to a positive correlation where both stocks and bonds experience declines together.

• Why does this happen? Rising interest rates hurt both the stock market (by increasing borrowing costs) and the bond market (by reducing bond prices). This has been exacerbated by economic growth concerns and geopolitical risks (e.g., tariffs). When both markets drop, it reduces the typical diversification benefits for investors, which means mortgage professionals might face more market volatility than usual.
• What does this mean for mortgage professionals? The typical strategy of diversifying across stocks and bonds is less effective now, and mortgage professionals should prepare for more synchronized market moves. Understanding this could help manage client expectations and navigate uncertain financial conditions.

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Word of Caution

While the data does suggest a strengthening trend, it's important to note that this analysis is based on a small data set from early 2025. Longer-term trends and larger datasets are necessary to confirm these patterns with more reliability. As such, the advice provided should be viewed with caution, and mortgage professionals should continue to monitor market conditions closely. The trend is noteworthy, but further data will help refine this strategy and offer even more confidence in future advice.

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Conclusion: Optimize Your Lock Strategy Based on Market Patterns

As we move through 2025, mortgage professionals can take advantage of these insights to optimize lock strategies:

• Wednesdays seem to be the best day to lock loans based on market performance.
• Fridays tend to show volatility and weakness, making it risky to lock at the end of the week.
• The rise in positive stock-bond correlations suggests that volatility will remain a key theme in the markets, and mortgage professionals must be prepared for increased market swings.

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By being mindful of these patterns and adjusting strategies accordingly, mortgage professionals can better manage lock timing and provide informed advice to their clients.

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For more details, read the full article: https://www.bloomberg.com/news/articles/2025-02-12/trump-tariff-spat-has-stock-dip-buyers-obsessed-with-wednesdays

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