CHM Blog

Last week there was no movement in rates, not the case this morning with the 10 year note trading down 12 bps from Friday in over night activity. Stock futures blew up, the NASDAQ at 6 am ET down 875 points, the DJIA down over 400 points. A Chinese start up, DeepSeek rocking AI stocks, claiming the cost of developing AI to be much less expensive that had been thought. Last week, the company released a reasoning model that also reportedly outperformed OpenAI’s latest in many third-party tests. “DeepSeek clearly doesn’t have access to as much compute as U.S. hyperscalers and somehow managed to develop a model that appears highly competitive,” Srini Pajjuri, semiconductor analyst at Raymond James, said in a note this morning.

Investors running to the safe havens of US treasuries as tech stocks crumble on the potential significant news from DeepSeek that implies much quicker and lower costs for the development of AI. Tech stocks are on track to lose $1.2 trillion in valuations today.

At 9:30 am the DJIA opened -188 after trading as low as 400, NASDAQ opened -609 after trading -775, S&P opened -109 from a low of 150. The 10 year note at 9:30 am -9 bps to 4.54%, the low 4.50%. FNMA 6.0 30 year coupon at 9:30 am +25 bps from Friday’s close and +35 bps from 9:30 am Friday morning.

At 10 am December new home sales were reported at 698K much better than 672K expected; we will have details this afternoon.

The announcement from DeepSeek has rattled markets, although there is no reason to believe stock indexes are headed substantially lower.

PRICES @ 10:00 AM

10 year note: 4.55% -8 bp (4.50% low over night)

5 year note: 4.36% -7 bp

2 year note: 4.22% -6 bp

30 year bond: 4.79% -6 bp

30 year FNMA 6.0: @9:30 am 100.64 +25 bp (+35 bp from 9:30 am Friday)

30 year FNMA 6.5: @9:30 am 102.40 +20 bp (+24 bp from 9:30 am Friday)

30 year GNMA 6.0: @9:30 am 100.75 +17 bp (+26 bp from 9:30 am Friday)

Dollar/Yen: 154.21 -1.81 yen

Dollar/Euro: $1.0517 +$0.0014

Dollar Index: 107.17 -0.27

Gold: $2,755.30 -$23.60

Bitcoin: 101,570 -3353

Crude Oil: $74.30 -$0.36

DJIA: 44,327 -97

NASDAQ: 19,436 -517

S&P 500: 6005 -95

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.