November 30th, 2021 9:10 AM by Richard Sardella MLO.100007700/NMLS 233568
After Friday’s market turmoil yesterday saw some settling, stocks increased, and interest rates edged higher. Most news about omicron yesterday was more upbeat, the variant isn’t as deadly as delta or COVID, infections don’t last long and the recovery is quicker. Yesterday it was believed that the present vaccines would be sufficient, Moderna saying not really. Top executives reiterated that the omicron variant’s many mutations suggest new vaccines will be needed, triggering a drop in financial markets. “The number of mutations on this virus are surprising,” co-founder Noubar Afeyan said in a Bloomberg Television interview. “We have to take it for the serious threat that it poses.” Chief Executive Officer Stephane Bancel, in an interview with the Financial Times, predicted a “material drop” in the existing shots’ efficacy and damped expectations new ones could be ready soon. Early this morning the DJIA traded down 400 points, the 10 yr. note at 5:30 am ET 1.42% -10 bps; investors flooding to safety while equity portfolios are being hit hard.
Later today (10 am ET) Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen will begin two days of testimony at Senate Banking Committee. In his prepared testimony Powell said the omicron variant of the coronavirus, poses risks to both sides of the central bank’s mandate to achieve stable prices and maximum employment. “The recent rise in Covid-19 cases and the emergence of the omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation,”... “Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions.” The testimonies of Powell and Yellen were scheduled at the Senate Banking Committee prior to the omicron revelation. Tomorrow the pair will go the House Financial Services Committee.
At 9 am this morning the Sept Case/Shiller home price index was +1.2% as expected, yr./yr. also as forecast at +19.5%. In another Sept house price index, the FHFA reported prices increased 0.9%, also as expected, yr./yr. +17.7%.
At 9:30 am the DJIA opened -282, NASDAQ -65, S&P -31. 10 yr. at 9:30 am 1.44% -6 bps. FNMA 2.5 30 yr. coupon at 9:30 am +23 bps and +57 bps from 9:30 am yesterday.
At 9:45 am November Chicago purchasing mgrs. index, expected at 68.4 unchanged from October, as released the index fell to 61.8. the lowest since last February.
At 10 am November Conference Board’s consumer confidence index thought to be at 110.7 from 113.8 in October, the index 109.5, the lowest since February. Present Situation Consumers’ appraisal of current business conditions was less favorable in November. 17.0% of consumers said business conditions are “good,” down from 18.3%. 29.0% of consumers said business conditions are “bad,” up from 25.7%. Consumers’ assessment of the labor market was moderately more favorable.
58.0% of consumers said jobs are “plentiful,” up from 54.8%. Conversely, 11.1% of consumers said jobs are “hard to get,” virtually unchanged from 11.0%. Consumers’ optimism about the short-term business conditions outlook increased in November.
24.1% of consumers expect business conditions will improve, up from 22.7%. 20.7% expect business conditions to worsen, down from 21.9%. Consumers were less optimistic about the short-term labor market outlook. 22.1% of consumers expect more jobs to be available in the months ahead, down from 24.4%. 18.9% anticipate fewer jobs, up slightly from 18.7%.
Speculation about the impact of the new strain is all over the map with little yet known. Most comments we are reading, and hearing is it will slow economic growth for a while but won’t lead to an economic contraction. “It takes a boom into a boomlet,” said Diane Swonk, chief economist at accounting and advisory firm Grant Thornton LLP. “We’ve got a lot of momentum coming in and that helps.” Oxford Economics said it would likely project global gross domestic product to grow 4.2% next year, down a little from its prior estimate of 4.5%.
PRICES @ 10:00 AM
10 yr. note: 1.44% -7 bp
5 yr. note: 1.10% -5 bp
2 Yr. note: 0.45% -3 bp
30 yr. bond: 1.81% -5 bp
Libor Rates: 1 mo. 0.099%; 3 mo. 0.170%; 6 mo. 0.246%; 1 yr. 0.419% (11/29/21)
30 yr. FNMA 3.0: @9:30 am 103.94 +14 bp (+25 bp from 9:30 am yesterday)
30 yr. FNMA 2.5: @9:30 am 102.80 +23 bp (+57 bp from 9:30 am yesterday)
30 yr. GNMA 2.5: @9:30 am 102.70 +16 bp (+53 bp from 9:30 am yesterday)
Dollar/Yuan: $6.3698 -$0.0183
Dollar/Yen: 112.57 -0.96 yen
Dollar/Euro: $1.1381 +$0.87
Dollar Index: 95.64 -0.70
Gold: $1798.40 +$16.10
Bitcoin: 58,172 +53
Crude Oil: $67.33 -$2.62
DJIA: 34,835 -301
NASDAQ: 15,799 +17
S&P 500: 4636 -19
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.