September 11th, 2018 8:42 AM by Richard Sardella MLO.100007700/NMLS 233568
September 11th! Early trading had stock indexes weaker and the 10 yr and MBS prices in early activity also under slight pressure. The 10 yr at 8:00 am EST 2.95% +1 bp and MBS prices -8 bps from yesterday’s close.
At 6:00 am the August NFTB small business index was fractionally better than forecasts at 108.8 (108.1 forecast); up from 107.9 in July. A new record in the survey's 45-year history. Leading the index higher beyond not only consensus forecasts but also the range of analysts' expectations was a 6-point gain to a net 10% in plans to increase inventories, a 3-point increase to a net 33% in plans to make capital outlays, and once again, plans to increase employment, which also rose 3 points to a net 26%, a record high. This is yet another data point that shows optimism although it doesn’t get first tier attention.
Last week the talks between the US and Canada ended with no deal, today Canadian Foreign Minister Chrystia Freeland returns to Washington to continue discussions. Meanwhile, Mexico is signaling that if there is no deal with Canada, it would move forward with just the US. Stocks under pressure this morning in pre-open trading on increased concerns that the US and China are not only not making progress but becoming more critical. Trump said yesterday that besides the $200B of tariffs the has threatened he is ready to add another $200B to that; if it comes to pass, then every import from China will be subject to an import tax. China exports just shy of $500B each year.
Back in 2016, a mysterious illness befell US officials in Cuba, no reason that could be attached to it. In June the same thing in China forcing the US to withdraw diplomats. Today evidence from communications intercepts has pointed to Moscow’s involvement during the investigation involving the FBI, CIA and other agencies, NBC reported, citing three unidentified U.S. officials and two other people briefed on the probe. Russia accused of poisoning two in the UK and the UK has indicted two Russians in its investigation. Nothing is proven in Cuba or China, but when you see smoke, there may be fire.
At 10:00 am July JOLTS job openings 6.939 mil on estimates of 6.665 mil. July wholesale inventories +0.6% as expected, sales unchanged.< /p>
At 1:00 pm Treasury will auction $35B of 3s beginning this week’s borrowing, tomorrow $23B of 10 yr notes. The anticipated August treasury budget to be reported Thursday -$164B.
The Hurricane headed for the US. If it ends up as badly as the forecasts, it is going to disrupt markets stocks, bonds, commodities just as it did in Texas.
PRICES @ 10:00 AM
10 yr. note: -10/32 (31 bp) 2.97% +3 bp
5 yr. note: -6/32 (18 bp) 2.86% +4 bp
2 Yr. note: -2/32 (6 bp) 2.75% +3 bp
30 yr. bond: -24/32 (75 bp) 3.12% +4 bp
Libor Rates: 1 mo. 2.138%; 3 mo. 2.334%; 6 mo. 2.552%; 1 yr. 2.862%
30 yr. FNMA 4.5 Oct: 101.36 -11 bp (-9 bp from 9:30) @10:05 MBS down 17 bps on the day
15 yr. FNMA 4.0 Oct: 102.14 -9 bp (-6 bp from 9:30 yesterday)
30 yr. GNMA 4.5 Oct: 102.02 -8 bp (-2 bp from 9:30 yesterday)
Dollar/Yuan: $6.8765 +$0.0206
Dollar/Yen: 111.47 +0.33 yen
Dollar/Euro: $1.1579 -$0.0015
Dollar Index: 95.32 +0.17
Gold: $1193.20 -$6.60
Crude Oil: $67.68 +$0.14
DJIA: 25,865.09 +8.02
NASDAQ: 7939.58 +15.42
S&P 500: 2877.83 +0.70
Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.