CHM Blog

Daily Market Analysis February 8, 2022

February 8th, 2022 10:04 AM by Richard Sardella MLO.100007700/NMLS 233568


Daily Market Analysis

Early this morning the 10 yr note climbed to 1.96%, 4 bps higher than yesterday, it slipped back a little as the morning progressed. Stock indexes yesterday, other than NASDA -82, were generally quiet. This morning pror to the 9:30 am ET open the indexes generally flat.

There isn’t anything in the news this morning that grabs attention; yeah, the US and Russia still talking the talk but presently it doesn’t look like a war is eminent. Meantime China rattling sabers, seeing an opening in its drive to take Taiwan.

And its back; the debt ceiling that never goes away. The can being kicked for years looks like it has been run over by a fleet of semis over the years. House leaders scheduled a vote to extend a temporary government funding measure through March 11, buying time for negotiators to work out a comprehensive fiscal 2022 package after a prolonged deadlock over how much to allocate for military and nondefense spending. An interim law currently funds the government through Feb. 18. Absent congressional action, many parts of the government would shut down starting at 12:01 am on Feb. 19. The Senate hasn’t set a time to vote on companion legislation after the measure clears the House.

Time to invest in equities? JPMorgan Chase strategists have what they describe as a near bulletproof indicator to strengthen their argument that stock markets are poised to rally. The signal is triggered when the Cboe Volatility Index (VIX) rises by more than 50% of its 1-month moving average, which it last did Jan. 25, according to the strategists led by Mislav Matejka. The indicator has proven 100% accurate outside of recessions over the last three decades. “We believe that equities still offer upside, and that the cycle is far from over,” the London-based strategists wrote in a Feb. 7 note. In addition to the VIX signal they look for more gains in earnings, a bottoming in Chinese activity and say investor sentiment has become too negative as of late.

At 9:30 am the DJIA opened +104, NASDAQ -23, S&P +1. 10 yr 1.96% +4 bps. FNMA 3.0 yr coupon -17 bps and -8 bps from 9:30 am yesterday; FNMA 3.5 coupon -14 bps and -10 bps from 9:30 am yesterday.

Dec US deficit in trade, expected -$83.0B, as released -%80.7B. The only data of importance this week, Jan CPI on Thursday. The week has little economic releases.

This afternoon Treasury begins its quarterly refunding with $50B 3 yr note auction; tomorrow a new 10 yr and on Thursday a new 30 yr bond.

10 yr looks like it isn’t going to stop until it hits 2.0% even though technically and fundamentally oversold. Still looking for another consolidation phase. Even a period of consolidating won’t provide much improvement.

PRICES @ 10:00 AM

10 yr note: 1.97% +5 bp

5 yr note: 1.81% +5 bp

2 yr note: 1.33% +4 bp

30 yr bond: 2.26% +4 bp

Libor Rates: 1 mo 0.125%; 3 mo 0.362%; 6 mo 0.622%; 1 yr 1.091% (2/7/22)

30 yr FNMA 3.0: @9:30 am 101.34 -17 bps (-8 bp from 9:30 am yesterday)

30 yr FNMA 3.5: @9:30 am 103.59 -14 bp (-10 bp from 9:30 am yesterday)

30 yr GNMA 3.0: @9:30 am 101.59 -16 bp (-10 bp from 9:30 am yesterday)

Dollar/Yuan: $6.3665 +$0.0338

Dollar/Yen: 115.49 +0.40 yen

Dollar/Euro: $1.1410-$0.0032

Dollar Index: 95.59 +0.19

Gold: $1823.40 +$1.60

Bitcoin: 43,760 -362

Crude Oil: $89.61 -$1.71

DJIA: 35,110 +19

NASDAQ: 13,942 -72

S&P 500: 4467 -17

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 February 8th, 2022 10:04 AM

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