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Daily Market Analsyis December 6, 2021

December 6th, 2021 8:46 AM by Richard Sardella MLO.100007700/NMLS 233568


Daily Market Analysis

This morning in futures trading early the DJIA +229, NASDAQ -4. The 10 yr note 1.38% +2 and MBS prices -12 bps frm Friday’s close. There are no data points today, this week the key report comes on Friday when Nov CPI is reported. Treasury auctions of 3s, 10s and 30s Tuesday, Wednesday, and Thursday.

Omicron has spread across the US according to officials in 16 states. Initial data from South Africa don’t show a resulting surge of hospitalizations. “Thus far, it doesn’t look like there’s a great degree of severity to it,” Anthony Fauci, U.S. President Joe Biden’s chief medical adviser, said on Sunday, while cautioning it’s too early to be certain. The more that is known about omicron the more it looks like it isn’t much more than an annual flu outbreak, increasing numbers of scientists suggesting it may be the beginning of the end of COVID. Moderna said there’s a “real risk” that existing Covid-19 vaccines will be less effective against omicron.

Over the weekend bitcoin had a rough time, at one point yesterday down to 42,000 frm 53,000 Friday, (20% frm its high). Risk in every market is high, seeing it in stocks, in interest rates, crude oil, currencies, and commodities.

Morgan Stanley strategists out this weekend in a note to its clients; While “not that concerned about omicron as a major risk factor for equities,” the strategists see headwinds building elsewhere, after Federal Reserve Chairman Jerome Powell signaled the possible accelerated tapering of asset purchases. “Tapering is tightening for the markets, and it will lead to lower valuations like it always does at this stage of any recovery.”

At 9:30 am ET the DJIA opened +312, NASDAQ +12, S&P +26. 10 yr 1.38% +2 bp. FNMA 2.5 30 yr coupon -8 bps frm Friday’s close and 27 bps higher than at 9:30 am Friday.

Next Wednesday the FOMC policy statement and the Fed’s quarterly forecast going out 2 yrs. Powell last week didn’t mince words when he said two times that he wants to increase the pace of the tapering. The plan as it stands now, $15B a month of less monthly buying would end tapering in June next year. Between now and the meeting two inflation gauges, November CPI this Friday and Nov PPI next Monday.

PRICES @ 10:00 AM

10 yr note: 1.38% +2 bp

5 yr note: 1.17% +3 bp

2 Yr note: 0.60% +1 bp

30 yr bond: 1.71% +3 bp

Libor Rates: 1 mo 0.104%; 3 mo 0.187%; 6 mo 0.271%; 1 yr 0.461% (121/3/21)

30 yr FNMA 3.0: @9:30 am 103.77 -3 bp (+11 bp rm 9:30 am Friday)

30 yr FNMA 2.5: @9:30 am 102.41 -8 bp (+27 bp frm 9:30 am Friday)

30 yr GNMA 2.5: @9:30 am 102.30 +13 bp (+38 bp frm 9:30 am Friday)

Dollar/Yuan: $6.3768 unch

Dollar/Yen: 113.17 +0.36 yen

Dollar/Euro: $1.1289 -$0.0024

Dollar Index: 96.26 +0.14

Gold: $1778.80 -$4.80

Bitcoin: 48,277 -641

Crude Oil: $67.53 +$1.27

DJIA: 35,058 +478

NASDAQ: 15,039 -46

S&P 500: 4563 +25

About Richard Sardella

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.

About This Report And Disclosure Information

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.

Posted by Richard Sardella MLO.100007700/NMLS 233568 on December 6th, 2021 8:46 AM

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