October 15th, 2021 8:48 AM by Richard Sardella MLO.100007700/NMLS 233568
Data at 8:30 am; Sept retail sales were better than forecasts. Sales increased 0.7% with estimates of a decline of 0.1% and August sales revised from +0.7% to +0.9%. Excluding auto and truck sales the expectations were +0.4%, as reported +0.8%. Excluding autos and gas sales up 0.7% as expected. Looks like households shrugged off supply constraints, the Delta variant and the end of enhanced unemployment benefits. Retail sales, which aren’t adjusted for inflation, rose 13.9% in September from a year earlier.
Also at 8:30 am Sept import and export prices; imports expected +0.6%, as reported +0.4%; yr./yr. +9.2% as thought. Exports +0.1% against +0.5% forecasts; yr./yr. +16.3% a little lower than 16.8% forecasts.
The key stock indexes rallied hard yesterday, the DJIA +535, NASDQ +252, S&P +74; in pre-opening trade in the futures arena this morning the indexes added more improvement. Inflation being transitory has finally become a myth, the big banks are getting in line. BofA, Morgan Stanley, and JP Morgan Chase all agreeing now that this increase in inflation is not temporary. Goldman Sachs Group President John Waldron also said this week that inflation is not transitory -- a sentiment echoed by BlackRock’s CEO Larry Fink, who added it’s “definitely not transitory.”
At 9:30 am the DJIA opened +198, NASDAQ +54, S&P +21. 10 yr. note 1.56% +5 bps. FNMA 2.5 30 yr. coupon at 9:30 am -16 bps and -8 bps from 9:30 am yesterday.
At 10 am A few minutes ago, the U. of Michigan consumer sentiment index, expected at 74.0 from 72.8 in September, as reported 71.4. Current conditions decreased to 77.9 from 80.1, expectations 67.2 down from 68.1 in Sept.
The 10 broke below its 20 day moving average yesterday, this morning back above it. The 10 has not been able to hold below the 20 or more than a day or two going back to early August. The 9 day RSI dropped to its neutral level at 50 on the rate improvements and pushed it down from oversold levels, this morning with the 10 increasing the relative strength back in bearish territory. 1.55% is a pivot point, the 10 broke lower for two sessions, now back to 1.56%. All of this points to higher rates and unless some major news interferes rates are destined to increase with inflation and now increasing calls that the Fed is falling behind in raising rates.
PRICES @ 10:00 AM
10 yr. note: 1.57% +6 bp
5 yr. note: 1.09% +3 bp
2 Yr. note: 0.39% +3 bp
30 yr. bond: 2.06% +4 bp
Libor Rates: 1 mo. 0.085%; 3 mo. 0.122%; 6 mo. 0.159%; 1 yr. 0.272% (10/14/21)
30 yr. FNMA 3.0: @9:30 am 104.44 -9 bp (unch from 9:30 am yesterday)
30 yr. FNMA 2.5: @9:30 am 102.72 -16 bp (-8 bp from 9:30 am yesterday)
30 yr. GNMA 2.5: @9:30 am 102.48 -48 bp (-10 bp from 9:30 am yesterday)
Dollar/Yuan: $6.4358 -$0.0041
Dollar/Yen: 114.43 +0.75 yen
Dollar/Euro: $1.1599 unch
Dollar Index: 93.96 unch
Gold: $1772.90 -$25.00
Bitcoin: 60,242 +2,751
Crude Oil: $82.20 +$0.89
DJIA: 35,237 +313
NASDAQ: 14,865 +42
S&P 500: 4465 +27
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.