December 7th, 2021 10:35 AM by Richard Sardella MLO.100007700/NMLS 233568
Yesterday the equity markets broke free from the clamp of virus fears. This morning the indexes continued where they ended yesterday; at 9 am ET DJIA +335, NASDAQ +291, S&P +60. The 10 yr. note rose 7 bps yesterday, this morning another 2 bps. MBS prices lost 14 bps yesterday, at 9 am -14 more.
Q3 productivity and unit labor costs at 8:30 am; productivity -5.2% with forecasts at -4.9%, unit labor costs +9.6% against +8.3%.
October US trade deficit was thought to be -$66.8B, as reported -$67.1B.
At 9:30 am the DJIA opened +324 after increasing 647 yesterday, NASDAQ +283 following +140 yesterday, S&P +58 and +53 yesterday. 10 yr. note at 9:30 am +3 bps at 1.46%. FNMA 2.5 30 yr. coupon at 9:30 am -12 bps and -20 bps from 9:30 am yesterday.
At 1 pm Treasury will auction $54B of 3 yr. notes.
Market strategists from big firms attributing the improvements in equities remain reluctant to go all in on the milder variant, attributing the out-sized gains in stocks on low volume holiday trading. “We’re in this period where investors are grappling for any news they can find and that, coupled with low liquidity, is leading to some big moves,” said Hugh Gimber, a strategist at J.P. Morgan Asset Management. Investors grappling for any news? Next week the FOMC and Powell’s promise to speed up tapering.
Global concerns are increasing; three potential crises are proceeding in tandem. A potential Russian invasion of Ukraine, continuing Chinese pressure on Taiwan and the potential collapse of Iran nuclear talks. “Taken together, they signal that the U.S. and its allies are at a dangerous moment—perhaps more dangerous than many Americans realize. The challenge for President Biden and the democratic leaders he’ll be consulting with this week is to find a way to show firmness on each front without provoking a crisis.” (WSJ). So far there isn’t any serious market concerns.
Interest rates today will continue to be driven by how equity markets trade. Next week the FOMC hangs over investors and traders. Recent whipsawing in daily movements in stocks should keep interest rates stable until later this afternoon when it will become clear how stock indexes will end the day.
PRICES @ 10:00 AM ET
10 yr. note: 1.45% +2 bp
5 yr. note: 1.24% +3 bp
2 Yr. note: 0.67% +4 bp
30 yr. bond: 1.77% +1 bp
Libor Rates: 1 mo. 0.103%; 3 mo. 0.190%; 6 mo. 0.276%; 1 yr. 0.465% (12/6/21)
30 yr. FNMA 3.0: @9:30 am 103.66 -9 bp (-11 bp from 9:30 am yesterday)
30 yr. FNMA 2.5: @9:30 am 102.22 -12 bp (-20 bp from 9:30 am yesterday)
30 yr. GNMA 2.5: @9:30 am 102.19 -12 bp (-11 bp from 9:30 am yesterday)
Dollar/Yuan: $6.3685 -$0.0082
Dollar/Yen: 113.68 +0.19 yen
Dollar/Euro: $1.1243 -$0.0043
Dollar Index: 96.53 +0.20
Gold: $1781.10 +$1.60
Bitcoin: 51,367 +2,260
Crude Oil: $71.57 +$2.08
DJIA: 35,699 +472
NASDAQ: 15,625 +400
S&P 500: 46780 +88
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.