January 8th, 2021 8:48 AM by Richard Sardella MLO.100007700/NMLS 233568
The Georgia elections went Democrat's way yesterday. The senate now 50/50 with Kamala Harris, the eventual tie-breaker when necessary. Equity markets are pleased, more fiscal spending, more stimulus coming, yet the tight make-up in both the House and Senate will restrain some of the wildest spending touted by some left-leaning Democrats.
Weekly jobless claims at 8:30 am ET, were thought to be about 803K, as reported 787K. -3K from the previous week; the four week average at 818.75K down from 837.50.
At 9:30 am ET, the DJIA opened +148, NASDAQ +145, S&P +28. 10 yr. at 9:30 am 1.08% +4 bps. FNMA 2.0 30 yr. coupon at 9:30 am -6 bps and -13 bps from 9:30 yesterday.
At 10:00 am ET, Dec ISM non-manufacturing index expected at 54.6 from 55.9 in Nov; the index hit at 57.2.
Interest rates are going to edge higher now after the 10 yr. note broke above 1.00% yesterday (1.04%). The move higher won't likely be swift, and we don't expect interest rates will increase to the March high when the 10 yr. increased to 1.26% in the near term. We expect trading to be choppy, the new technical resistance now at 0.98% that should hold any rally. Increased spending, more stimulus, possibly another $1 trillion, inflation will remain low. After one month of narrow trading of the 10 yr. and MBSs, the breach yesterday broke the balance. By 9:30 am this morning, the 10 yr. yield has increased 13 bps to 1.08% in 27 hours. It's not surprising, after the tight range over the last six weeks, once the range broke, it was expected an initial strong move would ensue.
PRICES @ 10:00 AM ET
10 yr. note: 1.07% +3 bp
5 yr. note: 0.45% +3 bp
2 Yr. note: 0.14% unch
30 yr. bond: 1.84% +3 bp
Libor Rates: 1 mo. 0.132%; 3 mo. 0.234%; 6 mo. 0.252%; 1 yr. 0.332 (1/06/20)
30 yr. FNMA 2.0: @9:30 103.39 -6 bps (-13 bps from 9:30 yesterday)
30 yr. FNMA 2.5: @9:30 105.17 -3 bps (-8 bps from 9:30 yesterday)
30 yr. GNMA 2.5: @9:30 105.16 -17 bps (-15 bps from 9:30 yesterday)
Dollar/Yuan: $6.4713 +$0.0095
Dollar/Yen: 103.78 +0.73 yen
Dollar/Euro: $1.2262 -$0.0066
Dollar Index: 89.86 +0.33
Gold: $1912.90 +$4.30
Bitcoin: $38,390 +$2536
Crude Oil: $50.75 +$0.12
DJIA: 31,036 +207
NASDAQ: 12,990 +250
S&P 500: 3797 +48
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.