Morning Market Update:
Stocks are trading near unchanged levels and Mortgage Bonds are slightly higher so far this morning. It’s Fed Day, with the Fed releasing their statement from their 2-day meeting at 2:pm E.T. There will be no press Conference, and the Fed will be leaving rates unchanged. The Main thing the markets will be listening for is direction on whether the Fed will hike in December, which I think they will, and their thoughts on inflation and the economy. Initial Jobless Claims, which measures individuals filling for unemployment benefits for the first time, showed that there were 214,000 claims last week. This represented a decrease of 1,000 from the previous report, which was revised slightly higher by 1,000 to 215,000. Essentially Claims remained stable and there is nothing new. We continue to remain near multi-decade lows and employers are holding onto their workers.
Mortgage Bonds continue to trade in a wide range between support at 99.438 and overhead resistance at the 25-day Moving Average. We have to be careful when in a wide range because there can be big price fluctuations before reaching support or resistance. The 10-year Treasury Note Yield is trading at 3.21% after almost testing 3.25% yesterday. We are in range between support at 3.19% and overhead resistance at the aforementioned 3.25%, but 3.25% is a very important ceiling. If that level is broken, rates could move much higher.
Hope everyone has an awesome day 😁
Morning Market Update:
Stocks are slightly lower and Mortgage Bonds are trading near unchanged levels so far this morning on Midterm Election Date. It’s hard to speculate the outcome of the elections and the potential market impact. In Housing news, Core logic release their home price index report for the month of September showing that home process across the US rose by 0.4% for the month and 5.6% year over year. This is an increase from 5.5% in August. Las Vegas, San Francisco, Denver, led the gains. As we have been saying, we do see appreciation slowing a bit down, but there is a big difference decelerating appreciation and prices dropping. Appreciation at 0.4% for September is quite strong. Core Logic forecasts for next year remained stable at 4.7% over the next year. Although 4.7% is not as hot as last year’s read. It is in line with our forecast and it will still create an enormous amount of wealth for those buying homes. Mortgage Bonds are still trading in a wide range between support at 99.438 which was tested yesterday, and overhead resistance at the 25-day Moving Average.
The 10-year treasury Note Yield is once again testing an important level at 3.19%. If Yields can break beneath 3.19%, they can test the 25-day Moving Average at 3.15%. If Yields bounce higher off of support, the next stop is 3.25%... and if that is broken the next level is 3.63%.
Hope everyone has a great day!! GO out there and Vote.
Morning Market Update:❌❌❌❌
Earlier this morning there were reports that President Trump had instructed officials to start drafting a trade agreement between Chine and the US.. but those rumors were eventually denied by a white house official. Stocks were up 350 points or so as measured by the Dow on the news, and retreated back to 200 points on the denial. Officials, including Larry Kudlow, did say that there is a possibility of a deal, but he was very noncommittal. Mortgage Bonds are lower, pressured by a rallying Stock Market and a Strong Jobs Report, which is the news items everyone has been waiting for. The Unemployment Rate remained stable 3.7%, which is the lowest level in nearly 50 years. Mortgage Bonds are on their way to down to test support at 99.719 which means we could see another 15 or 16bp move lower. The 10-year is trading at 3.176% and looks like it wants to test 3.19%, 3.25% is the real test. Hope everyone has an awesome Friday!!
Stocks have ended the day sharply higher. The Dow closed up 241.12 at $25,115.76 S&P 500 closed up 29.11 at $2,711.74. Mortgage Bonds ended the day lower.
Earlier this morning the Mortgage Bankers Association reported that Mortgage Application volume decreased by 2.5% last week. Applications to purchase a home were down 2.0% and are now down only 0.4% from this time last year, which is Impressive considering some of the headwinds like higher rates and low inventory. Refinances were down 4.0% last week and they remained down 32% from this time last year. The Refinance share of mortgage activity dropped from 39.8% to 39.4 of total applications. ARM’s made up 7.6% of applications, up from 7.0% last week. The average 30-year mortgage remained steady at 5.11%, about 93bp or almost 1.0% higher from this time last year. Remember that the rate the MBA cites typically has some amount of points included.
Mortgage Bonds are lower are in the middle of a range between support at 99.719 and overhead resistance at their 25-day Moving Average. There is about 32bp of room to the downside before Bonds reach support. The 10-year is now breaking above its 25-day Moving Average at 3.1398. The next level of resistance will be at 3.19 and if that gives way, then 3.25 will be the next resistance level.
Hope Everyone has an Awesome November!!
Morning Market Update:
Stocks are higher in the early going and Mortgage Bonds are lower so far today, but hanging in there considering the Dow is up nearly 200 points.
The Highly anticipated Personal Consumption Expenditures (PCE) Report, Which is the Fed’s Favored measure of inflation, showed that inflation cooled slightly in September. Headline inflation, on a year over year basis, decreased from 2.2% to 2.0%, The core rate, which strips out food and energy prices, remained unchanged at 2.0%, which also happens to be exactly the Fed’s target rate for core inflation. The 10-year is trading at 3.10% just beneath overhead resistance at 3.11%, which may keep a lid on yields. If 3.11% is pierced, 3.13% is the next stop. Mortgage bonds are right up against tough ceiling at their 25-day Moving Average, Which they failed to break above on Friday. With little to no room to the upside, and significant room to the downside before reaching the next level of support at 99.719. Hope everyone has an awesome day😁
Morning Market Update:
Stocks are down significantly, with the Dow down over 400 points and the S&P down over 40 points. About 150 of the Down points are attributed to weak earnings and guidance from 3M and Caterpillar. I thought Stocks could sell off today after the S&P 500 closed beneath its 200-Day Moving Average yesterday. If the S&P 500 breaks beneath the low of October 11th, which is 27.13, it will create a new low of the recent cycle and Stocks could lose more ground. Bonds are the Beneficiary, with Mortgage Bonds up 22bp in the early going. Mortgage Bonds are benefiting from a weaker stock market this morning and are making up some ground in the wide range that they have been trading in between support at 99.719 and overhead resistance at the 25-day Moving Average. There is still plenty of room to the upside before reaching resistance, so long as Stocks don’t begin to rebound and recover their losses. The 10-year has dropped all the way down to 3.12%, which is the 25-day Moving Average, after closing right on the important 3.19% yesterday. If Yields can break beneath the 25-day Moving Average the next stop is 3.11% and then there is significant room for yields to move Lower. Hope everyone has an awesome day J 🏡👍