November 16th, 2020 9:31 AM by Richard Sardella MLO.100007700/NMLS 233568
The DJIA is on fire! This morning, Moderna released that its vaccine was 94.5% effective in a preliminary analysis of a large late-stage clinical trial, another sign that a fast-paced hunt by scientists and pharmaceutical companies is paying off with potent new tools that could help control a worsening pandemic. The vaccine also appeared to be effective in preventing the most serious Covid-19 infections. According to Moderna's statement, there were no severe cases among people who got the vaccine, compared with 11 in volunteers who received placebo shots. A preliminary analysis of data from more than 30,000 volunteers showed Moderna's vaccine prevented virtually all symptomatic cases of Covid-19, the disease caused by the coronavirus. Add Pfizer's 90% effective rate, and the outlook is quite promising. Manufacturing and distribution will be a huge undertaking; everyday consumers won't likely get the vaccine for four to six months.
The virus is continuing to spread at accelerating speed, now more cases than the prior two spikes. The U.S. surpassed 11 million coronavirus cases Sunday as Florida reported the most infections since July and new cases in California hit a three-month high. Deaths and hospitalizations are also rising. Europe has also seen cases soar as much of the world braces for what is expected to be a dire winter.
The economy needs another stimulus and needs it badly. Can (will) Pelosi and McConnell get a package in the next couple of weeks in the lame-duck session? The lack of stimulus puts the economic outlook less optimistic. Jerome Powell has all but pleaded for it; while Pelosi and McConnell play unnecessary political roulette.
At 1:45 pm ET this afternoon, Biden and Harris are expected to speak about their plans for a post-Covid economic recovery and longer-term growth.
At 9:30 am ET, the DJIA opened +344 after trading +450 in futures markets early this morning, NASDAQ +12, S&P +27. 10 yr. at 9:30 am 0.91% +2 bps. FNMA 2.0 30 yr. coupon at 9:30 am +3 bps from Friday's close and unchanged from 9:30 Friday.
Elon Musk's SpaceX launched four astronauts into orbit, the first company approved by the National Aeronautics and Space Administration to ferry people routinely into space. It also provided a capstone for the agency's strategy of using public-private partnerships to accelerate human space exploration.
Technically, the 10 yr. note, based on our analysis, remains negative. 0.90% this morning after two sessions at 0.88%. Although our work continues to tilt toward a bearish outlook, simultaneously though there is little reason to expect interest rates to increase much. The Fed will backstop any push higher. On the opposite view, expecting interest rates to fall back to the lows in Sept (10 yr. 0.65%) isn't in the cards.
PRICES @ 10:00 AM ET
10 yr. note: 0.89% unch
5 yr. note: 0.40% unch
2 Yr. note: 0.18% unch
30 yr. bond: 1.65% +1 bp
Libor Rates: 1 mo. 0.136%; 3 mo. 0.222%; 6 mo. 0.246%; 1 yr. 0.339% (11/13/20)
30 yr. FNMA 2.0: @9:30 103.34 +3 bp (unch from 9:30 Friday)
30 yr. FNMA 2.5: @9:30 104.41 +5 bp (+9 bp from 9:30 Friday)
30 yr. GNMA 2.5: @9:30 104.44 +11 bp (+14 bp from 9:30 Friday)
Dollar/Yuan: $6.5837 -$0.0222
Dollar/Yen: 104.58 -0.04 yen
Dollar/Euro: $1.1825 -$0.0013
Dollar Index: 92.72 -0.04
Gold: $1886.50 +$0.30
Crude Oil: $41.48 +$1.35
DJIA: 29,764 +285
NASDAQ: 11,871 +42
S&P 500: 3607 +22
Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 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.