CHM Blog

Weekly jobless claims 210K down 8K.Q1 GDP, the second look, was expected -1.3% from the advance report at -1.4%, as released -1.5%. Personal consumption expenditures expected at 3.0% increased to 3.1%. While consumer spending was revised higher, the report showed downward revisions to inventories and residential investment. The GDP report also included the first read on business earnings for the period. Pretax corporate profits decreased an annualized 2.3% from the prior quarter and were up 12.5% from a year earlier. Last year was the most profitable year for American corporations since 1950. None of the reports at 8:30 am ET caused any reactions.

The recent flattening in inflation is going to give the Fed some options if the trend continues and may generate that soft landing the Fed wants to achieve. Inflation is not declining, just not increasing as much as expected; March and April PPI, CPI saw less inflation than markets were expecting. Tomorrow the next key inflation reading with April PCE, the Fed’s key inflation indicator will be reported at 8:30 am ET, today with that report looming we are not expecting much movement in rates. The current estimates for the PCE price index m/m 0.3% from 0.9% in March, yr./yr. +6.3% from +6.6% in March; core PCE +0.3% unchanged from March, yr./yr. +4.9% from 5.2%. If the estimates hold, expect increased thoughts that interest rates may have topped out when the 10 yr. note increased to 3.81% and immediately started to retreat to yesterday’s low of 2.72%. Currently there are some already talking about the potential the Fed will increase the FF rate 50 bps in June and then back off the current stance of another 50 bps in July. We will stay with two 50 bp increases, the Fed just cannot cave again even if inflation is cooling.

At 9:30 am the DJIA opened +206, NASDAQ -23, S&P +14. 10 yr. 2.74% unch FNMA 4.5 30 yr. coupon at 9:30 am +8 bps from yesterday’s close and +12 bps from 9:30 am yesterday.

At 10 am April pending home sales, expected -1.5% from -1.2% in March, as reported sales -3.9% and -9.1% yr./yr.

At 1 pm $47B of 7 yr. notes will be auctioned by Treasury; yesterday’s 5 yr. auction was average compared to the last 12 auction averages.

PRICES @ 10:00 AM

10 yr note: 2.75% unch

5 yr note: 2.68% -3 bp

2 Yr note: 2.45% -5 bp

30 yr bond: 2.99% =1 bp

Libor Rates: 1 mo .10023%; 3 mo 1.553%; 6 mo 2.054%; 1 yr 2.684% (5/25//22)

30 yr FNMA 4.0: @9:30 100.47 +13 bp (+16 bp from 9:30 am yesterday)

30 yr FNMA 4.5: @9:30 102.00 +8 bp (+12 bp from 9:30 am yesterday)

30 yr GNMA 4.0: @9:30 101.38 +14 bp (+21 bp from 9:30 am yesterday)

Dollar/Yuan: $6.7389 +$0.0452

Dollar/Yen: 127.13 -0.14 yen

Dollar/Euro: $1.00717 +$0.0037

Dollar Index: 101.91 -0.15

Gold: $1841.00 -%5.30

Bitcoin: 28,765 -99.7

Crude Oil: $112.60 +$2.27

DJIA: 32,537 +416

NASDAQ: 11,601 +166

S&P 500: 4033 +54

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.