CHM Blog

China reported that its economy grew 6.3% year-over-year in the second quarter, missing expectations for 7.1% growth. China’s economic recovery lost momentum in the second quarter, adding to risks for the world economy. US stock indexes prior to the 9:30 am ET open traded slightly lower.

The only data point today, the July Empire State manufacturing index that increased 1.1% down from +6.6 in June.

The dollar at a one year low, driven by the outlook the fed may be close to ending its rate increases. Some of the comments today, looking at a March rate cut (March 2024). Former Federal Reserve Vice Chairman Richard Clarida, now working at PIMCO said it is reasonable if markets expect a soft economic landing. He added the obvious, the dynamics may change. Swap markets indicate another quarter-point increase this month is a virtual certainty, while the first 25 basis-point cut is likely to come by the end of March. Treasury 10-year yields are likely to move in a 3.25%-to-4.25% range this year, according to Clarida.

At 9:30 am the DJIA opened -29, NASDAQ +42, S&P +5. 10 year 3.82% -1 bp. FNMA 6.0 30 year coupon -8 bps from Friday’s close and -27 bp from 9:30 am Friday.

Not much news for markets today. This week has housing data; NAHB, June starts and permits and existing home sales. Two key reports, June retail sales and weekly jobless claims.

According to an article in the WSJ today, wage increases are now coming faster than inflation. That wages are increasing is a problem for the Fed that is highly concerned that wage gains may keep inflation concerns high, J Powell has made that key point when asked about inflation outlooks. Not adjusting for inflation, private-sector workers’ hourly wages were up more than 4% in June from a year earlier. Those gains have eased over the past year but remain enough to outpace inflation this summer. Overall consumer prices in June rose 3% from a year earlier, down sharply from a four-decade high a year prior.

PRICES @ 10:00 AM

10 year note: 3.84% +1 bp

5 year note: 4.04% unch

2 year note: 4.76% +1 bp

30 year bond: 3.93% +1 bp

30 year FNMA 6.0: @9:30 am 100.81 -8 bp (-27 bp from 9:30 am Friday)

30 year FNMA 5.5: @9:30 am 99.61 -6 bp (-22 bp from 9:30 am Friday)

30 year GNMA 5.5: @9:30 am 99.63 unch (-1 bp from 9:30 am Friday)

Dollar/Yuan: $7.1759 +$0.0348

Dollar/Yen: 139.25 +0.60 yen

Dollar/Euro: $1.1212 -$0.0016

Dollar Index: 100.13 +0.21

Gold: $1950.50 -$13.50

Bitcoin: 30,252 -28

Crude Oil: $74.40 -$1.02

DJIA: 34,517 +8

NASDAQ: 14,163 +49

S&P 500: 4510 +5

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.