December 21st, 2020 9:19 AM by Richard Sardella MLO.100007700/NMLS 233568
Buy the rumor, sell the fact, an age old traders mantra. Today the stock indexes are under strong pressure. The stimulus deal finally got done as markets widely believed, in pre-market trading in the futures markets sent the DJIA down 450 points; at 8:00 am ET, the 10 yr. note yield 0.90% -4 bps.
There are no economic releases today, the week’s economic reports tomorrow and Wednesday. Key data; existing and new home sales, personal income and spending, both consumer measurements, and Nov durable goods orders.
The House and Senate are set to vote today on a $900 billion pandemic relief package along with a $1.4 trillion measure to fund the government. The spending package includes funds for small businesses, stimulus payments for most individuals, supplemental unemployment benefits, support for vaccine distribution, and resources for education, childcare, and housing. There was a vote to extend keeping the government open on Friday. The spending bill and the stimulus bill are attached. Both parties claimed many of their priorities were achieved. It isn’t over; Democrats are serious about adding more when the new administration takes over, and Democrats win the Georgia run-off elections. The idea to vastly increase money to states is one key Pelosi and Schumer want. Senate Democratic leader Chuck Schumer said he expects a “more robust” bill to be considered after President-elect Joe Biden takes office on Jan 20th. House Speaker Nancy Pelosi said, “We are going to have a much easier time than we had with a Republican president and a Republican Senate.”
“This action in the lame duck session is just the beginning. Our work is far from over,” Biden said in a statement including other actions his administration plans to take. “Immediately, starting in the new year, Congress will need to get to work on support for our COVID-19 plan, for support to struggling families, and investments in jobs and economic recovery.”
There is a new variant of the COVID virus spreading in Europe. Almost a panic in Europe with new restrictions keeping UK citizens from leaving the country. Police blocking people from boarding packed trains, holidays abroad scrapped, and travel within Europe banned after London went into an emergency lockdown. UK Prime Minister Johnson canceled plans to allow families to see each other over the festive period as the government warned that a new strain of the coronavirus is “out of control.” There were scenes of panic at train stations, with people defying social-distancing rules to get out of the capital before the new rules took effect on Sunday. We hear that a new strain spreads more rapidly, but scientists so far are not sure about what needs to be done. At this moment, US and global markets are not reacting to it with little factual data yet.
Not much now until the end of the year and the Jan 5th Georgia senate run-off elections. By Wednesday afternoon, the halls will be emptying. The markets close Thursday afternoon and obviously closed on Christmas day.
The stock indexes, after a panic bout of selling early today, are improving. The 10 yr. note yield at 8:00 am ET 0.94%, at 10:00 am 0.92% -2 bp.
PRICES @ 10:00 AM ET
10 yr. note: 0.92% -2 bp
5 yr. note: 0.37% -1 bp
2 Yr. note: 0.13% +1 bp
30 yr. bond: 1.67% -2 bp
Libor Rates: 1 mo. 0.143%; 3 mo. 0.235%; 6 mo. 0.258%; 1 yr. 0.334% (12/18/20)
30 yr. FNMA 2.0: @9:30 103.56 unch (-10 bp from 9:30 Friday)
30 yr. FNMA 2.5: @9:30 105.16 +3 bp (-1 bp from 9:30 Friday)
30 yr. GNMA 2.5: @9:30 105.05 -14 bp (-3 bp from 9:30 Friday)
Dollar/Yuan: $6.5496 +$0.0126
Dollar/Yen: 103.57 +0.25 yen
Dollar/Euro: $1.2208 -$0.0049
Dollar Index: 90.36 +0.35
Gold: $1888.00 -$0.90
Crude Oil: $47.15 -$1.95
DJIA: 29,880 -298
NASDAQ: 12,600 -155
S&P 500: 3651 -58
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 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.