November 6th, 2020 8:45 AM by Richard Sardella MLO.100007700/NMLS 233568
At 8:30 am ET this morning, the October employment data was stronger than forecasts, stock indexes improved after being under a little pressure before 8:30 am; the 10 yr. note unchanged then increased 3 bps. The unemployment rate was thought to be 7.7%, declined to 6.9%. Non-farm jobs increased 638K on estimates of 575K, and private jobs exploded +906K compared to 650K forecasts (ADP on Wednesday reported private jobs at 365K). Manufacturing jobs were thought to be +48K, as reported +38K. Job losses for those unemployed for 27 weeks at a six-year high. Average hourly earnings +0.1% less than 02% estimates, yr./yr. earnings +4.5%. The DJIA flipped from -250 to +15 from 8:25 to 8:45 am; the 10 yr. unchanged at 8:25 am, at 8:45 am 0.81% +4 bp.
At 9:30 am ET, the DJIIA opened -80, NASDAQ -65, S&P -17. 10 yr. note 0.82% +5 bps. FNMA 2.0 30 yr. coupon at 9:30 -19 bps from yesterday’s close and -19 bps from 9:30 yesterday.
The virus is spreading rapidly in the US and in Europe, where more countries in the region have begun some lockdowns. Greece today locked its entire economy. With winter coming, cases are expected to continue to increase. The entertainment industry headed for another slowdown.
At 3:00 pm ET this afternoon, September consumer credit is thought to have increased $7.9B after August credit was down $7.2B.
We always lean toward the technical condition of markets for our outlook. The 10 yr., as we have repeatedly mentioned, remains bearish, although still trading in a tight and predictable range. There is no appetite for the 10 yr. yield when it gets up to 0.90%, as is evident now., The note hit 0.94% briefly on Wednesday morning before the US open, failed, and the rate fell back to its strong technical resistance at 0.74%, this morning at 0.82%.
PRICES @ 10:00 AM ET
10 yr. note: 1.82% +1 bp
5 yr. note: 1.61% unch
2 Yr. note: 1.55% +1 bp
30 yr. bond: 2.29% +1 bp
Libor Rates: 1 mo. 1.692%; 3 mo. 1.872%; 6 mo. 1.894%; 1 yr. 1.954% (1/06/20)
30 yr. FNMA 3.0: @9:30 101.69 -3 bp (-8 bp from 9:30 yesterday)
15 yr. FNMA 3.0: @9:30 102.64 -4 bp (-7 bp from 9:30 yesterday)
30 yr. GNMA 3.0: @9:30 102.84 unch (-11 bp from 9:30 yesterday)
Dollar/Yuan: $6.9440 -$0.0320
Dollar/Yen: 108.04 +0.03 yen
Dollar/Euro: $1.1152 -$0.0046
Dollar Index: 96.95 +0.28
Gold: $1572.90 +$4.10
Crude Oil: $62.66 -$0.61
DJIA: 28,619.77 -83.61
NASDAQ: 9066.05 -5.41
S&P 500: 3237.21 -9.07
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.