November 24th, 2020 12:48 PM by Richard Sardella MLO.100007700/NMLS 233568
Stock indexes continue to climb, recently fueled by another vaccine coming online. AstraZeneca announced its vaccine is coming, and it is easier to transport than Pfizer or Moderna, and it’s a one dose vaccine compared to two shot vaccines. AstraZeneca and Oxford are running trials of the vaccine in different parts of the world. They are currently only studying two full doses of the vaccine in their U.S. study, which is expected to enroll 30,000 volunteers. But the company is still recruiting participants and could add another arm to conduct further studies of the regimen using the half-dose. Very promising, but the company is still testing and looking into discrepancies between one and two doses.
Biden is quickly setting up his cabinet; Janet Yellen for Treasury is getting all of the attention. She is deep in experience working in government positions for years (Fed chief, Council of Economic Advisers just two). She should have little difficulty being confirmed by the Senate regardless of the outcome of the Senate races in Georgia that will determine which party has control. Speaking of the Georgia races, markets are buoyed by the potential of the Senate staying in the hands of Republicans that would slow or stop some of the more liberal policies that many on the extreme left in the Democratic party have espoused during the campaign. Looking over the rest of Biden’s selections, most are long-timers that have been with Obama and Biden for years, but that was expected and not unusual. What is shaking the tree a little, many of the campaign staff that worked for is election are not being considered for top jobs in the administration. “People are pissed,” said a Biden adviser. “I think I’m going to be taken care of but I have not been taken care of yet. I am really interested to find out how you even find out how you got a job in this White House.”
The transition to the Biden administration improved yesterday when GSA, after a green light from President Trump, opened up to providing necessary information that the new administration requires for a smooth transition. Trump, though, as you know, is still reluctant to admit he lost and concede, but his recent actions suggest he is close. Trump, in a post on Twitter, offered support for the move. The GSA announcement will allow the president-elect to access millions of dollars in funds and focus on putting together a leadership team. It also paves the way for Biden and Vice President-elect Kamala Harris to receive regular national security briefings that Trump also gets. Trump said on Twitter that his team would move “full speed ahead” with challenging “what will go down as the most corrupt election in American political history,” adding that he would “never concede.”
At 9:00 am ET, Sept Case/Shiller 20 city home price index was expected +0.5% increased to 1.3%, yr./yr. home prices increased 6.6% compared to August’s 5.4% yr./yr. The Sept FHFA home price index increased by 1.7%, better than 0.9% forecasts; yr./yr. home prices increased by 9.1%. Good news for the housing sector going forward. Interest rates will stay low, and the lack of inventory continues to point to increases in home prices. The housing market has been booming during the pandemic in the U.S., with cheaper borrowing costs and the desire for more space to spread out fueling a surge in purchases.
At 9:30 am ET, the DJIA opened +309, NASDAQ +60 S&P +28. 10 yr. at .87% +2 bps. FNMA 2.0 30 yr. coupon at 9:30 am -3 bps from yesterday and unchanged from 9:30 yesterday.
At 10:00 am ET, Nov consumer confidence index expected at 98.0 from 101.4 in October; as released, the index dropped to 96.1, the expectations also fell from 98.2 to 89.5.
This afternoon Treasury will auction $56B of 7 yr. notes; yesterday, the 2 and 5 yr. auctions were not aggressive in bidding.
No change in our technical analysis, still bearish but very little movement overall. In the last three days, the 10 yr. yield has increased from 0.82% to 0.87% this morning.
PRICES @ 10:10 AM ET
10 yr. note: 0.875% +2 bp
5 yr. note: 0.39% unch
2 Yr. note: 0.17% unch
30 yr. bond: 1.59% +4 bp
Libor Rates: 1 mo. 0.150%; 3 mo. 0.206%; 6 mo. 0.253%; 1 yr. 0.335% (11/23/20)
30 yr. FNMA 2.0: @9:30 103.53 -3 bp (unch from 9:30 yesterday)
30 yr. FNMA 2.5: @9:30 104.66 -3 bp (-4 bp from 9:30 yesterday)
30 yr. GNMA 2.5: @9:30 104.80 -11 bp (-3 bp from 9:30 yesterday)
Dollar/Yuan: $6.5918 +$0.0058
Dollar/Yen: 104.69 +0.14 yen
Dollar/Euro: $1.1852 +$0.0011
Dollar Index: 92.52 unch
Gold: $1798.80 -$39.00
Crude Oil: $44.32 +$1.26
DJIA: 29,967 +376
NASDAQ: 11.904 +24
S&P 500: 3609 +31
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.