November 18th, 2020 10:00 AM by Richard Sardella MLO.100007700/NMLS 233568
Stock index futures early this morning slightly better, the 10 yr. unchanged at 0.86%. MBS prices began +6 bps from yesterday's improvement.
At 7:00 am ET this morning, weekly MBA mortgage applications; the composite -0.3%, purchase apps +4.0%, and refinance apps -2.0%.
At 8:30 am ET, October housing starts and permits. Starts were expected 1.460 mil, as released starts jumped to 1.530 mil. Permits expected 1.560 mil, as released 1.545 mil. Looking back to Sept. starts were very strong, Sept starts 1.459 mil; permits compared to Sept were the same, no gains or losses. Starts increased by 4.9%, and Sept. was revised from +1.9% to +6.3%.
Both the Mortgage Bankers Association and Fannie Mae have recently increased their mortgage volume forecasts for this year and next. Fannie Mae's November forecast calls for $4.12 trillion in mortgage originations this year, up from $4.08 trillion in the October outlook. For 2021, the latest projections call for $2.72 trillion in volume, up from the $2.62 trillion. MBA's forecast for 2020 to $3.39 trillion from October's $3.18 trillion. Next year $2.56 trillion, compared with $2.49 trillion one month prior. FNMA now expects sales to increase by 0.8% and new home sales up 6.2%. A wide difference between FNMA and the MBA implies a lot of present uncertainty. Single-family housing starts in October were at a rate of 1.179M, 6.4% higher than the revised September figure of 1.108M. In October, single-family permits were at a rate of 1.120M, 0.6% above the revised September figure of 1.113.
Will a stimulus package happen soon? Yesterday and before that, both parties were unwilling to make a deal; this morning, Democrats are saying they want to get back to negotiations on another coronavirus relief bill restart this week after months of stalemate. Pelosi and Chuck Schumer are motivated by the surge in Covid-19 cases nationwide as an impetus for quickly crafting another relief bill. Several of the aid measures passed in the spring have expired or are set to expire at the end of the year. The White House is no longer involved in negotiations. Now it's McConnell leading the Republican efforts.
At 9:30 am ET, the DJIA opened +77, NASDAQ -1, S&P unchanged. The 10 yr. at 9:30 am 0.86% unchanged. FNMA 2.0 30 yr. coupon at 9:30 am+2 bps from yesterday's close and +20 bps from 9:30 am yesterday.
This afternoon at 1:00 pm ET, the Treasury will auction $27B of 20 yr. bonds.
Pfizer has ended its trials and is ready to begin when FDA approves. The vaccine trial showed a 95% success rate and two months of safety data, paving the way to apply for an emergency US authorization within days. Pfizer said there were 170 cases of COVID-19 in its trial of more than 43,000 volunteers, and only eight people with the disease had been given the vaccine rather than a placebo, meaning the vaccine had a 95% efficacy rate. Of the 10 people who developed severe COVID-19, one had received the vaccine. The US Food and Drug Administration's vaccine advisory committee is set to review and discuss the data in a public meeting that will likely be held in December. Moderna on Monday released preliminary data for its vaccine, showing 94.5% effectiveness. Moderna named five categories of severe side effects experienced by at least 2% of those who received its vaccine. It listed fatigue at a frequency of 9.7%, muscle pain at 8.9%, joint pain at 5.2%, headache at 4.5%, pain at 4.1%, and redness around the injection site at 2%. Groups such as healthcare workers will be prioritized in the United States for vaccinations this year. It will be months before large-scale rollouts begin.
PRICES @ 10:00 AM ET
10 yr. note: 0.86% unch
5 yr. note: 0.38% unch
2 Yr. note: 0.18% unch
30 yr. bond: 1.60% -1 bp
Libor Rates: 1 mo. 0.149%; 3 mo. 0.231%; 6 mo. 0.258%; 1 yr. 0.338% (11/17/20)
30 yr. FNMA 2.0: @9:30 103.59 +2 bp (+20 bp from 9:30 yesterday)
30 yr. FNMA 2.5: @9:30 104.61 +3 bp (+9 bp from 9:30 yesterday)
30 yr. GNMA 2.5: @9:30 104.73 +2 bp (+20 bp from 9:30 yesterday)
Dollar/Yuan: $6.5619 +$0.0053
Dollar/Yen: 103.89 -0.29 yen
Dollar/Euro: $1.1870 +$0.0008
Dollar Index: 92.35 -0.07
Gold: $1876.90 -$8.90
Crude Oil: $41.88 +$0.45
DJIA: 29,848 +65
NASDAQ: 11,859 -40
S&P 500: 3609 unch
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.