CHM Blog

Daily Market Analysis December 21, 2021

December 21st, 2021 9:16 AM by Richard Sardella MLO.100007700/NMLS 233568


Daily Market Analysis

Stock indexes started better this morning, the 10 yr. note yield began at 1.47% +4 bps, MBS prices down 8 bps.

No data today, Treasury will auction $20B of 20 yr. bonds at 1 pm ET.

Everything spins around omicron, the concerns and worries are increasing with CDC now saying 70% of all new cases are omicron. In the last two sessions the DJIA dropped 1,000 points, this morning in pre-opening futures markets the DJIA up 281, NASDAQ +156, S&P +37.

According to Bloomberg nowcasts omicron will drag Q4 growth down. The global economy is expanding just 0.7% in the final three months of the year, half the pace of the previous quarter and below the rate of around 1% witnessed right before the crisis. “As 2021 draws to an end, the global economic recovery risks being thrown off track by the omicron variant of the coronavirus,” said Tom Orlik, chief economist for Bloomberg Economics. “Particularly Europe looks vulnerable: Recoveries for Germany, France and Italy are increasingly under strain from the surge in cases.” China has weakened to a 4.5% rate this quarter, while Brazil has slumped to 0.2%. Russia, India and South Africa also slipped. On a monthly basis, the euro-area and Japan are both weaker in December than November, while the U.S., Canada and the U.K. strengthened. The upside is that having weakened in the third quarter, the U.S. is accelerating to 4.9% from 2.1% on a quarterly basis, according to the nowcasts.

Inflation forecasts are mixed, some believe inflation will slow next year, including the Fed’s forecasts. The Fed is currently expected to launch its first rate increase in three years at the March or May FOMC meetings, that is a way off though. The Bank of England last week raised its key interest rate for the first time in three years, The constant revelations of new virus variants hang over all forecasts that are surfacing now. The U.S. Federal Reserve’s favored measure of inflation is rising 5% this quarter, up from 4.3% in the previous three months. Consumer prices in the euro-area and the U.K. are both advancing 4.4%, while those in China are up 2.1%.

Omicron is the variant of concern, The new variant accounted for 73% of all Covid-19 infections in the U.S. last week, with almost all of the remaining cases being delta. Scientists racing to track its progress and determine whether it can evade vaccines, is more transmissible than previous variants or causes less-severe illness.

The DJIA opened +323, NASDAQ +150, S&P +40. At 9:30 am the 10 yr. traded at 1.48% +5 bps, FNMA 2.5 30 yr. coupon -11 bps from yesterday’s close and -19 bps from 9:30 am yesterday.

PRICES @ 10:00 AM

10 yr. note: 1.47% +4 bp

5 yr. note: 1.21% +4 bp

2 Yr. note: 0.66% +3 bp

30 yr. bond: 1.91% +5 bp

Libor Rates: 1 mo. 0.103%; 3 mo. 0.214%; 6 mo. 0.317%; 1 yr. 0.532% (12/20/21)

30 yr. FNMA 3.0: @9:30 am 103.58 -8 bp (-11 bp from 9:30 am yesterday)

30 yr. FNMA 2.5: @9:30 am 102.06 -11 bp (-19 bp from 9:30 am yesterday)

30 yr. GNMA 2.5: @9:30 am 102.20 -8 bp (-21 bp from 9:30 am yesterday)

Dollar/Yuan: $6.3715 -$0.0042

Dollar/Yen: 113.85 +0.22 yen

Dollar/Euro: $1.1274 unch

Dollar Index: 96.53 -0.02

Gold: $1795 +$0.20

Bitcoin: 48,646 +1.633

Crude Oil: $70.21 +$1.98

DJIA: 35,232 +300

NASDAQ: 15,061 +81

S&P 500: 4593 +25

About Richard Sardella

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.

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 21st, 2021 9:16 AM

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