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Daily Market Analysis March 31, 2022

March 31st, 2022 8:55 AM by Richard Sardella MLO.100007700/NMLS 233568


Daily Market Analysis

At 8:30 am ET this morning Feb personal spending was expected at 0.5%, as reported +0.5%; personal spending was thought to be +0.5% but a little weaker at +0.2%. The weakness in spending driven by inflation as consumers increasingly feel the pinch. The decline was due entirely to a decrease in spending on merchandise; purchases of goods and services, adjusted for changes in prices, fell 0.4% from the prior month, following a 2.1% jump in January. Last week Jerome Powell said in his speech; “It continues to seem likely that hoped-for supply-side healing will come over time as the world ultimately settles into some new normal, but the timing and scope of that relief are highly uncertain,” Fed Chair Jerome Powell said in a speech last week. “In the meantime, as we set policy, we will be looking to actual progress on these issues and not assuming significant near-term supply-side relief.”

The PCE inflation data was as estimated; +0.6% m/m and +6.4% yr./yr. up from 6.1% in Jan. Core PCE +0.4% m/m as expected and down from +0.5% in Jan, yr./yr. +5.4% fractionally lower than +5.5% forecasts but up from 5.2% in Jan. No major surprises in the data but inflation is creeping higher when viewed on a yr./yr. perspective. Prior to the data the 10 yr. note yield was at 2.32%, the initial reaction pushed it up a bp to 2.33%; MBS prices prior to 8:30 am +11 bps, at 8:45 am +2 bp. (see below for 10 am levels).

Also, at 8:30 am weekly jobless claims, expected at 195K increased to 202K, still very low levels and about where claims were prior to the pandemic.

Crude oil price is declining this morning on reports Pres. Biden is considering releasing roughly a million barrels of oil a day from U.S. reserves, for several months, to combat rising gasoline prices and supply shortages. WTI futures dropped as much as 5.5% this morning on signs the U.S. was considering the release. The US is pushing for the International Energy Agency to coordinate a global release by other countries. A final decision hasn’t been reached on the global release, but the White House may make an announcement on the U.S. release later today. OPEC+ still resists pressure from the U.S. to boost output to ease prices.

At 9:30 am the DJIA opened -107, NASDAQ -5, S&P -8. 10 yr. note 2.34% -1 bp after being down to 2.31% early this morning. FNMA 4.0 30 yr. coupon at 9:30 am +6 bps from yesterday and +27 bps better than 9:30 am yesterday.

At 9:45 am March Chicago purchasing mgrs. index, expected at 57.0 from 56.3, as reported the index jumped to 62.0.

Tomorrow March employment data should keep markets in check today. Those peace talks in Turkey continue but with little progress. US and global markets continue to watch but there isn’t any specific movement that can be attributed to the war other than oil prices. US stocks holding, not improving, interest rates this week showed little direct concern. Inflation is expected to increase, and Powell made it clear last week the Fed will increase the FF rate at a faster clip than what markets were excepting. A lot of talk in financial news sources about the inversion of the yield curve, every guest on Bloomberg and the WSJ has taken up the chatter. If a recession is in the future it is well down the line and won’t be an issue until corporate earnings weaken.

PRICES @ 10:00 AM

10 yr note: 2.34% -1 bp

5 yr note: 2.43% unch

2 Yr note: 2.32% +1 bp (2 bps lower than the 10)

30 yr bond: 2.46% -1 bp

Libor Rates: 1 mo 0.455%; 3 mo 0.967%; 6 mo 1.472%; 1 yr 2.126% (3/30/22)

30 yr FNMA 4.0: 102.08 +6 bp (+25 bp from 9:30 am yesterday)

30 yr FNMA 4.5: 103.38 -6 bp (+10 bp from 9:30 am yesterday)

30 yr GNMA 4.0: 101 .89 +2 bp (+16 bp from 9:30 am yesterday)

Dollar/Yuan: $6.3394 -$0.0083

Dollar/Yen: 121.61 -0.22 yen

Dollar/Euro: $1.1087 -$0.0073

Dollar Index: 98.25 +0.46

Gold: $1944.50 +$5.50

Bitcoin: 47,062 -170

Crude Oil: $103.85 -$3.97

DJIA: 35,074 -155

NASDAQ: 14,360 -82

S&P 500: 4583 -19

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 March 31st, 2022 8:55 AM

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