January 3rd, 2019 9:41 AM by Richard Sardella MLO.100007700/NMLS 233568
Stock indexes weaker again this morning. The 10 yr yield at 2.64% -2 bps from 4:00 pm ET yesterday. Yesterday after 4:00 pm the 10 yr declined to 2.63% at the end of the day. MBS prices this morning slightly higher than yesterday, +5 bps from 4:00 pm yesterday.
ADP reported private jobs in Dec increased 271K, estimates were +175K; Nov jobs were revised lower to 157K from 179K originally reported.
Weekly claims 231K +10K.
GM reported Q4 sales down 2.7%; GM does not report monthly sales. The other automakers set to report Dec sales through the day. The industry is expecting slower sales in 2019; even the SUVs slowed for GM in Q4.
Apple stock is under pressure this morning on soft sales in China, and the cost of their phones appears to have hit a consumer ceiling. It cut its revenue outlook for the first time in almost two decades. Tim Cook said sales will be about $84B in the quarter ended Dec. 29, down from earlier estimates of $89B to $93B. Shares fell as much as 9% during pre-market trading this morning. Asian money is flocking into the Japanese yen sending it to a 20 month high against the dollar.
Congress back today; likely the House will work on a bill to end the government shutdown; it's important for the House now to lay the blame on the shutdown at the door of the White House. Trump won’t bite on whatever the House works out, but he is losing leverage as the shutdown continues into the 14th day.
At 10:00 am Dec ISM manufacturing index expected at 57.9 from 59.3 in Nov; the index fell to 54.1. The New Orders Index registered 51.1 percent, a decrease of 11 percentage points from the November reading of 62.1 percent. The Production Index registered 54.3 percent, 6.3-percentage point decrease compared to the November reading of 60.6 percent. The Employment Index registered 56.2 percent, a decrease of 2.2 percentage points from the November reading of 58.4 percent. The Supplier Deliveries Index registered 57.5 percent, a 5-percentage point decrease from the November reading of 62.5 percent. The Inventories Index registered 51.2 percent, a decrease of 1.7 percentage points from the November reading of 52.9 percent. The Prices Index registered 54.9 percent, a 5.8-percentage point decrease from the November reading of 60.7 percent, indicating higher raw materials prices for the 34th consecutive month.
Tomorrow Dec employment data AND Jerome Powell, Janet Yellen and Ben Bernanke in a roundtable discussion.
Investors are continuing to move into safe havens; US treasuries as we know, gold has increased $80.00/oz. the last few weeks, the yen continues to strengthen.
PRICES @ 10:00 AM
10 yr. note: unch 2.62% -2 bp from yesterday
5 yr. note: +1/32 (3 bp) 2.45% -1 bp
2 Yr. note: unch 2.48%
30 yr. bond: +11/32 (34 bp) 2.93% -3 bp
Libor Rates: 1 mo. 2.507%; 3 mo. 2.793%; 6 mo. 2.873%; 1 yr. 3.002%
30 yr. FNMA 4.0: @9:30 102.09 +3 bp (+12 bp from 9:30 yesterday)
15 yr. FNMA 4.0: @9:30 102.41 -3 bp (+5 bp from 9:30 yesterday)
30 yr. GNMA 4.0: @9:30 102.52 +2 bp (+11 bp from 9:30 yesterday)
Dollar/Yuan: $6.8737 +$0.0116
Dollar/Yen: 107.76 -1.12 yen
Dollar/Euro: $1.1365 +$0.0022
Dollar Index: 96.53 -0.13
Gold: $1290.50 +$6.40
Crude Oil: $46.95 +$0.41
DJIA: 22,900.72 -445.50
NASDAQ: 6526.19 -139.75
S&P 500: 2466.24 -43.69
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.