CHM Blog

Markets and the Fed have been worrying about the economic outlook. So far the employment outlook remains strong, yesterday the April JOLTS job openings far exceeded estimates, expected at 7.10 million increased to 7.391 million. The number of job quits in the US fell by 150,000 to a four-month low of 3.194 million in April.

Another picture appeared this morning, May ADP jobs thought to be 110K dropped to 37K, the lowest increase in 2 yrs. Services sector added 36K jobs, led by leisure/hospitality (38K), financial activities (20K) and information (8K) while job losses occurred in professional/business services (-17K), education/health (-13K) and trade/transportation/utilities (-4K). Also, the goods producing sector lost 2K jobs as falls in natural resources/mining (-5K) and manufacturing (-3K) offset a rise of 6K jobs in construction. Annual pay growth for job-stayers was little changed at 4.5% and pay for job-changers rose 7%, unchanged from April's revised figure.

Friday the BLS will release its May employment data, it too is expected to show job softening, NFP jobs expected at 129K down from 177K in April; private jobs 123K down from 157K in April. Traders and markets focus more on BLS data.

The initial reaction to the ADP jobs drove the 10 year note from 4.47% to 4.40%. The note hasn’t traded below 4.40% over the last month and with BLS employment data on Friday the rate may not have the momentum to push below it today.

At 9:30 am ET the DJIA opened +60, NASDAQ +57, S&P +13. 10 year note 4.41% -6 bps. FNMA 6.0 30 year coupon at 9:30 am +15 bps from yesterday’s close and +11 bp from 9:30 am yesterday.

At 9:45 am the ISM services index for May; expected 52.0 from 51.6. It was reported at 49.9%.

PRICES @ 10:00 AM

10 year note: 4.70% +1 bp

5 year note: 4.46% -1 bp

2 year note: 4.28% -2 bp

30 year bond: 4.94% +2 bp

30 year FNMA 6.0: @9:30 am 100.17 -8 bp (-10 bp from 10 am yesterday)

30 year FNMA 6.5: @9:30 am 102.09 -6 bp ( -8 bp from 10 am yesterday)

30 year GNMA 6.0: @9:30 am 100.56 -4 bp (-1 bp from 10 am yesterday)

Dollar/Yen: 158.31 +0.25 yen

Dollar/Euro: $1.0294 -$0.0047

Dollar Index: 109.22 +0.68

Gold: $2,681.40 +$16.00

Bitcoin: 95,003 -1458

Crude Oil: $74.23 -$0.02

DJIA: 42,239 -199

NASDAQ: 19,477 -12

S&P 500: 5899 -10

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 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.