January 20th, 2023 10:34 AM by Richard Sardella MLO.100007700/NMLS 233568
The 10 began at 3.44% in the US and was the high since yesterday, no movement overnight. MBS prices lower. Stock indexes began flat in futures trading this morning. Japan's core CPI was up 4.0% yr./yr. in December, representing the sharpest rate of increase since 1982, but Bank of Japan Governor Kuroda repeated that the central bank plans to maintain its ultra-loose policy. The UK retail sales followed the US with weakness, recording its sharpest drop in retail sales for the month of December since the series began in 1989.
Tech companies continue to layoff workers, Google cutting 12,000 jobs, a 6.0% reduction. The cuts follow Facebook parent Meta Platforms Inc., Twitter Inc., Google parent Alphabet Inc., and Microsoft Corp. 1.65% decrease, Amazon 18,000 workers cut. The slowdown in the tech industry has also started to reverberate on Wall Street where revenue for tech-related deals has fallen off. It isn’t only tech that is losing jobs, Goldman Sachs, 3,200 jobs and Salesforce cutting 10% of its workers in the New Year amid recession fears.
Former Treasury Sec Larry Summers told a panel at the World Economic Forum’s annual meeting that the idea being put forward by a former International Monetary Fund chief economist, who have suggested lifting inflation targets from 2% to 3% to avoid recessions was a very bad idea; “To suppose that some kind of relenting on an inflation target will be a salvation would be a costly error, it would ultimately have adverse effect as it did in a spectacular way during the 1970s.”
Inflation has slowed, recent announcements from several companies in the food business are saying now they won’t increase prices in the future, some even cutting prices on meat and other foods, or offering more product for the same price.
The 10 yr. note has found solid support at 3.40%.
At 9:30 am ET the DJIA opened +20, NASDAQ +63, S&P +13. 10 yr. at 9:30 am 3.46% +7 bp. FNMA 5.5 30 yr. coupon at 9:30 am -21 bps from yesterday’s close and -15 bps from 9:30 am yesterday.
At 10 am the only data today, Dec existing home sales, expected at 3.970 mil from 4.09 mil in November, as reported sales were 4.02 mil, down 1.5% from -7.9% in November and -34% yr./yr.
PRICES @ 10:00 AM
10 yr note: 3.45% +5 bp
5 yr note: 3.55% +6 bp
2 Yr note: 4.19% +5 bp
30 yr bond: 3.62% +5 bp
Libor Rates: 1 mo 4.508%; 3 mo 4.815%; 6 mo 5.080%; 1 yr 5.305% (1/19/23)
30 yr FNMA 6.0: @9:30 am 102.23 -9 bp (-5 bp from 9:30 am yesterday)
30 yr FNMA 5.5: @9:30 am 101.32 -21 bp (-15 bp from 9:30 am yesterday)
30 yr GNMA 5.5: @9:30 am 101.17 -6 bp (-10 bp from 9:30 am yesterday)
Dollar/Yuan: 46.7841 +$0.0072
Dollar/Yen: 130.31 +1.86 yen
Dollar/Euro: $1.0814 -$0.0019
Dollar Index: 102.51 +0.45
Gold: $1923.20 -$0.70
Bitcoin: 21,093 +152
Crude Oil: $79.80 -$0.53
DJIA: 32,994 -50
NASDAQ: 10,942 +90
S&P 500: 3912 +13
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.
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.