CHM Blog

Daily Market Analysis June 22, 2022

June 22nd, 2022 8:57 AM by Richard Sardella MLO.100007700/NMLS 233568


Daily Market Analysis

Yesterday the stock indexes rallied after slipping last Friday. The DJIA +641, NASDAQ +271, S&P +90 yesterday; this morning in pre-open trading the indexes pointing to a decline. Yesterday with equity markets improved the interest rates increased, now this morning stocks are retreating as the debate over a recession continues. The 10 yr. note yield increased 6 bps yesterday to 3.28% but MBS prices held and ended the session generally unchanged after being down 22 bps at 9:30 am ET yesterday. This morning the 10 yr. note at 3.19% -11 bps and MBS prices up 48 bps at 9 am.

Treasury futures began declining shortly after yesterday's cash close, continuing the decline into the night. The market found some support at the start of the European session, but it reached fresh lows in recent trade, declining alongside other sovereign debt as concerns about growth return to the forefront.

At 9:30 am this morning Fed chair Jerome Powell will begin his required semi-annual testimony on the economy and inflation at the Senate Banking Committee. There are no scheduled economic releases today. Optimism is evaporating that policy makers can achieve a soft landing as they navigate a course of aggressive monetary tightening to tame inflation. “Markets are flip-flopping between recession fears and inflation fears,” Paul Donovan, chief economist at UBS Global Wealth Management, said in a note. “Today it is recession fears.” Deutsche Bank AG’s Chief Executive Officer Christian Sewing joined a growing chorus of executives and policy makers who warn that the global economy may be headed for a recession as central banks step up efforts to curb inflation. Fed Chair Jerome Powell is expected to reiterate his resolve when he speaks. Tomorrow Powell goes the House Financial Services Committee. Concerns about a recession ebb and flow, today with stocks opening lower the commodity markets are under pressure, crude oil dropping significantly (-$7.00 at 9 am).

At 9:30 am the DJIA opened -340, NASDAQ -120, S&P -43. 10 yr. note at 9:30 am 3.16% -12 bps. FNMA 4.5 30 yr. coupon at 9:30 am +41 bps and +60 bps from 9:30 am yesterday; the 5.0 30 yr. coupon +58 bps and +42 bps from 9:30 am yesterday.

Biden plans to call on Congress to enact a gasoline tax holiday to cool soaring pump prices and alleviate the pressure on consumers.

Now Bitcoin is a leading indicator for stocks? Mark Mobius who co-founded Mobius Capital Partners after spending more than three decades at Franklin Templeton Investments; “Cryptocurrencies are a measure of investor sentiment,” he said in an interview Wednesday. “Bitcoin goes down, the next day the Dow Jones goes down. That’s the pattern you get. That shows that Bitcoin is a leading indicator.”

The 10 yr. note at key near term technical levels, the 9 day RSI at neutral and the yield on the 10 at the level that was a breakout last week.

PRICES @ 10:00 AM

10 yr note: 3.13% -15 bp

5 yr note: 3.20% -17 bp

2 Yr note: 3.06% -16 bp

30 yr bond: 3.23% -11 bp

Libor Rates: 1 mo 1.642%; 3 mo 2.154%; 6 mo 2.842%; 1 yr 3.625% (6/21/22)

30 yr FNMA 5.0: 101.39 +28 bp (+58 bp from 9:30 am yesterday)

30 yr FNMA 4.5: 99.69 +42 bp (+60 bp from 9:30 am yesterday)

30 yr GNMA 4.0: 98.80 +47 bp (+60 bp from 9:30 am yesterday)

Dollar/Yuan: $6.7034 +$0.0139

Dollar/Yen: 135.84 -0.78 yen

Dollar/Euro: $1.0563 +$0.0030

Dollar Index: 104.16 -0.27

Gold: $1846.20 +$7.40

Bitcoin: 20,458 -378

Crude Oil: $102.94 -$6.58

DJIA: 30,324 -206

NASDAQ: 11,055 -14

S&P 500: 3746 -18

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 June 22nd, 2022 8:57 AM

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