November 9th, 2020 9:45 AM by Richard Sardella MLO.100007700/NMLS 233568
What a wonderful surprise this morning. Pfizer and BioNTech proved better than expected at protecting people from Covid-19. The two firms announced this morning proves their vaccine is 90% effective. The companies said Monday. Pfizer said it is on track to ask health regulators for permission to sell the shot before the end of this month, if pending data indicate the vaccine is safe. The vaccine could go into distribution this month or next, if health regulators approve. The findings came too early for researchers to assess the vaccine's safety, which the US Food and Drug Administration says must include two months of monitoring at least half the study's subjects for side effects. It is a huge step forward and overall not expected this early. Before any vaccine is available to the public with enough product isn't likely until maybe March next year; need billions world-wide. But let's not forget there are other vaccine trials proceeding.
Now, in this lame-duck political environment, the parties have a few weeks to do what has been a political embarrassment, get a stimulus bill passed.
The equity markets spiked, at 8:30 am ET, the DJIA +1500, NASDAQ +65. Interest rates increased, the 10 yr. at 8:30 am 0.91% +9 bps, MBS prices at 8:30 am -25.
The 10 yr. note has been technically bearish since it broke above 0.74% on October 14; as you know from our comments, the next technical point that added to the negativity was when the note broke above its next support at 0.80%. Now today, the next support at 0.90% is in jeopardy. If 0.90% holds, we expect 1.00% is possible.
At 9:30 am ET, the DJIA opened +1450, NASDAQ +166, S&P +135 (new high). 10 yr. note 0.93% +11 bp. FNMA 2.0 30 yr. coupon at 9:30 am -39 bps and -44 bps from 9:30 Friday.
At 1:00 pm ET, $54B 3 yr. note auction.
The news over the weekend has sent the 10 yr. up and MBS prices lower. Technically, it adds additional bearish sentiment, and more than that, has likely ended any thoughts for lower mortgage rates anytime soon.
PRICES @ 10:00 AM ET
10 yr. note: 0.937% +12 bp
5 yr. note: 0.43% +6 bp
2 Yr. note: 0.0.18% +1 bp
30 yr. bond: 1.73% +12 bp
Libor Rates: 1 mo. 0.127%; 3 mo. 0.205%; 6 mo. 0.243% 1 yr. 0.333% (11/6/20)
30 yr. FNMA 2.0: @9:30 103.28 -39 (-44 bp from 9:30 Friday)
30 yr. FNMA 2.5: @9:30 104.45 -17 bp (-8 b from 9:30 Friday)
30 yr. GNMA 2.5: @9:30 104.16 -67 bp (-48 bp from 9:30 Friday)
Dollar/Yuan: $6.6296 +$0.0182
Dollar/Yen: 105.25 +1.89 yen
Dollar/Euro: $1.1860 -$0.0016
Dollar Index: 92.52 +0.29
Gold: $159.20 -$93.50
Crude Oil: $40.88 +$3.74
DJIA: 29,545 +1219
NASDAQ: 12,048 +153
S&P 500: 3621 +111
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.