CHM Blog

Daily Market Analysis November 26, 2021

November 26th, 2021 9:46 AM by Richard Sardella MLO.100007700/NMLS 233568


Daily Market Analysis

A new variant of the COVID virus was discovered in South Africa. Fears that the strain could fuel outbreaks in many countries and pressure health systems, potentially evading vaccines and complicating efforts to reopen economies and borders sent a wave of risk aversion across global markets Friday. U.S. stock futures, European equity indexes and crude oil tumbled while Treasuries rallied. Governments around the world have started issuing bans on travelers from South Africa and nearby countries. Researchers are still trying to determine whether it is more transmissible or more lethal than previous strains. Dozens of countries restricted travel to and from southern Africa, while a case was confirmed in Belgium.

The reaction has been panic. Pre-open stock futures, DJIA -800, NASDAQ -150 , S&P -75. At 9 am 10 yr. note yield down 10 bps from Wednesday, MBS prices +44 bps, crude oil -$4.41, gold +$20.00.

There are no economic data today. The stock market will close at 1 pm, the bond market at 2 pm.

From Wednesday’s high at 1.70% to 1.53% this morning on the 10.

At 9:30 am the DJIA opened -810, NASDAQ -178, S&P -70. 10 yr. 1.53% -11 bps. FNMA 2.5 30 yr. coupon at 9:30 am +48 bps and +50 bps from 9:30 am Friday.

Recently we have warned of increased market volatility; what we have this morning isn’t anything we or anyone expected last Wednesday. 48 hours ago, no one knew about the new strain that has really upset US and global markets. When a shock hits over-extended markets the reactions to a surprise can be excessive. Whether this new strain is as dangerous as markets think now isn’t understood yet. Money markets are offloading bets on central bank interest-rate hikes in a hurry, as inflation fears give way to concerns that a new coronavirus strain may spread globally and slow economic growth. The timing of a first 25-basis-point rate increase by the Federal Reserve has moved to September from June, while briefly pricing out any more hikes unit 2023. It’s a similar story in the U.K. where the Bank of England is now expected to tighten policy in February instead of next month. The World Health Organization still trying to determine whether it is more transmissible or more lethal than previous strains.

PRICES @ 10:00 AM

10 yr. note: 1.51% -13 bp

5 yr. note: 1.18% -16 bp

2 Yr. note: 0.52% -13 bp

30 yr. bond: 1.87% -10 bp

Libor Rates: 1 mo. 0.093%; 3 mo. 0.175%;6 mo. 0.259%; 1 yr. 0.471% (11/25/21)

30 yr. FNMA 3.0: @9:30 am 103.66 +19 bp (+22 bp from 9:30 am Wednesday)

30 yr. FNMA 2.5: @9:30 am 102.22 +48 bp (+50 bp from 9:30 am Wednesday)

30 yr. GNMA 2.5: @9:30 am 102.20 +50 bp (+44 bp from 9:30 am Wednesday)

Dollar/Yuan: $6.3924 +$0.0055

Dollar/Yen: 113.58 -1.79 yen

Dollar/Euro: $1.1291 +$0.0082

Dollar Index: 96.21 -0.56

Gold: $1799.60 +$15.30

Bitcoin: 54,693 -4,141

Crude Oil: $72.39 -$6.00

DJIA: 34,886 -918

NASDAQ: 15,617 -228

S&P 500: 4614 -87

About Richard Sardella

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.

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 November 26th, 2021 9:46 AM

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