CHM Blog

Daily Market Analysis July 29, 2022

July 29th, 2022 10:35 AM by Richard Sardella MLO.100007700/NMLS 233568


Daily Market Analysis

At 8:30 am ET June personal income and spending were better than estimates; income up 0.6% on expectations of +0.5%, spending expected +0.9% increased 1.1%. The Fed’s inflation data, PCE stronger than thought. June PCE estimated at +0.9% increased 1.0% m/m and yr./yr. +6.8% against 6.7% expecte4d. The core PCE expected at +0.5% increased 0.6% m/m, yr./yr. +4.8% against forecasts of 4.7%. There was no initial reaction to the stronger inflation reads; the 10 was at 2.71% +3 bps before and didn’t move. MBS prices began this morning down 20 bps but by 8:45 am down just 14 bps from yesterday’s close.

Also, at 8:30 am Q2 employment cost index was expected to be up 1.1%, as reported +1.3%. Yr./yr. expected +4.6% increased 5.1%, a fresh record, in data back to the early 2000s. The increase heightening concerns that inflation will remain persistently high and prompt even more aggressive action from the Federal Reserve. Taken with the PCE increase and it begs the question about the continuing inflation increases. Powell got two key inflation points today. In a press conference Wednesday following the central bank’s decision to raise interest rates by another 75 basis points, he said the ECI index is “a very important one because it adjusts for composition” of employment. The Atlanta Fed’s wage growth tracker climbed 6.7% in June from a year earlier -- the most in data back to 1997. Wages are increasing but inflation eats up almost every bit of higher wages for most Americans.

  • Eurozone's Q2 flash GDP expanded 0.7% qtr./qtr. (expected 0.2%; last 0.6%), growing 4.0% yr./yr. (expected 3.4%; last 5.4%)
  • Germany's Q2 flash GDP was unchanged qtr./qtr. (expected 0.1%; last 0.8%) and up 1.5% yr./yr. (expected 1.8%; last 3.9%)
  • France's Q2 flash GDP expanded 0.5% qtr./qtr. (expected 0.2%; last -0.2%), growing 4.2% yr./yr. (expected 3.7%; last 4.8%)
  • Italy's Q2 flash GDP expanded 1.0% qtr./qtr. (expected 0.3%; last 0.1%), growing 4.6% yr./yr. (expected 3.7%; last 6.2%)
  • Spain's Q2 flash GDP expanded 1.1% qtr./qtr. (expected 0.4%; last 0.2%), growing 6.3% yr./yr. (expected 5.5%; last 6.3%)

At 9:30 am the DJIA opened +26, NASDAQ +72, S&P +15. 10 yr. 2.71% +3 bp. FNMA 4.5 30 yr. coupon at 9:30 am -8 bps from yesterday’s close and +4 bp from 9:30 am yesterday. .

At 9:45 am the July Chicago purchasing mgrs. index expected at 56.0 unchanged from June, the index dropped to 52.1.

At 10 am the final July U. of Michigan consumer sentiment index was expected unchanged from mid-month at 51.1, the index increased to 51.5.

Yesterday Janet Yellen spoke up with her assessment; acknowledging a slowdown she called necessary to tame inflation while rejecting the notion the country had entered a recession.

Next week is employment week for July. The following week the next inflation reports with CPI and PPI (Aug 10th and Aug 11th).

PRICES @ 10:00 AM 10 yr note: 2.69% +1 bp 5 yr note: 2.72% +3 bp 2 Yr note: 2.90% +4 bp 30 yr bond: 3.04% =1 bp Libor Rates: 1 mo 2.373%; 3 mo 2.783%; 6 mo 3.341%; 1 yr 3.762% (7/28/22) 30 yr FNMA 5.0: @10:00 am 101.53 -6 bps (+5 bp from 10:00 am yesterday) 30 yr FNMA 4.5: @10:00 am 102.52 -11 bp (unch from 10:00 am yesterday) 30 yr GNMA 4.0: @10:00 am 100.94 +5 bp (+21 bp from 10:00 am yesterday) Dollar/Yuan: $6.7503 +$0.0030 Dollar/Yen: 134.30 +0.05 yen Dollar/Euro: $1.0154 -$0.0043 Dollar Index: 106.61 +0.26 Gold: $1772.50 +$3.30 Bitcoin: 23,748 -265 Crude Oil: $99.90 +$3.47 DJIA: 32,585 +56 NASDAQ: 12,297 +135 S&P 500: 4105 +33
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 July 29th, 2022 10:35 AM

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