April 7th, 2021 9:15 AM by Richard Sardella MLO.100007700/NMLS 233568
Quiet beginning today with little news; the 10 yr. unchanged in early morning trade, stock indexes before the 9:30 am ET open fractionally lower.
Weekly MBA mortgage applications continue to decline; last week, the composite -5.0%, purchases -5.0% and refinances -5.1%.
Biden set to tout his $2.5 trillion infrastructure plan later today (1:45 pm ET). He is trying to gain acceptance from Republicans, not an easy task. Biden won a significant victory from the Senate parliamentarian that allows Democrats to pass legislation without enlisting Republicans if it were to come to that. He still has to be careful with his members, though; some Dems are questioning the plan's extreme expense. According to the Democrat's timetable, they want the bill ready to vote by Memorial Day; seven weeks from now, markets won't be bothered with the debate until there are more specifics.
At 8:30 am ET, the Feb US trade deficit was expected at -$70.4B, as released -$71.1B. International trade is composed of merchandise (tangible goods) and services. It is available nationally by export, import, and trade balance.
At 9:30 am ET, the DJIA opened -32, NASDAQ -22, S&P unchanged. 10 yr. 1.66% unchanged. FNMA 2.5 30 yr. coupon at 9:30 am +4 bps, and +5 bps from 9:30 am yesterday. It didn't take five minutes before the indexes turned positive.
Financial markets await the release of the minutes from the latest FOMC meeting (March 17th) this afternoon at 2:00 pm ET. We are looking for any nugget that may provide additional information about inflation and economic outlooks. Most of the time, the minutes don't reveal much that isn't already known, but mining data sometimes does uncover a nugget or two.
At 3:00 pm ET Feb consumer credit; expected +$5.0B.
According to data from the Financial Industry Regulatory Authority, Wall Street's self-regulatory arm, leverage in stock investing has increased to a record $814B. Borrowed money invested in the equity market. The margin is buying up 47% from a year ago and the highest borrowing since 2007 when markets were excessively bullish and a few months before the financial crisis. Before that, the last time investor borrowings had grown so rapidly was during the dot-com bubble in 1999. Not completely driven to buy more, but it does raise a warning flag in some traders' thinking.
The 10 yr. note at 3:00 am ET this morning dropped to 1.63%; then it increased to 1.67%, where it trades now. Still holding for the 10 yr. to decline to 1.60%, although keep in mind, the wider expectations are for higher rates, the 10 yr. to 2.0%. All the coming additional spending and supply issues increase inflation thoughts.
PRICES @ 10:00 AM ET
10 yr. note: 1.66% unch
5 yr. note: 0.86% -1 bp
2 Yr. note: 0.15% -1 bp
30 yr. bond: 2.32% unch
Libor Rates: 1 mo. 0.110%; 3 mo. 0.197%; 6 mo. 0.201%; 1 yr. 0.286% (4/6/21)
30 yr. FNMA 2.0: @9:30 100.27 +2 bp (+4 bp from 9:30 yesterday)
30 yr. FNMA 2.5: @9:30 103.00 +4 bp (+5 bp from 9:30 yesterday)
30 yr. GNMA 2.5: @9:30 103.08 -9 bp (-6 bp from 9:30 yesterday)
Dollar/Yuan: $6.5432 +$0.0037
Dollar/Yen: 109.83 +0.10 yen
Dollar/Euro: $1.1893 +$0.20
Dollar Index: 92.36 +0.03
Gold: $1736.60 -$6.40
Bitcoin: 56,705 -1539
Crude Oil: $58.98 -$0.35
DJIA: 33,439 +9
NASDAQ: 13,697 -1
S&P 500: 4076 +2
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.