October 26th, 2020 10:07 AM by Richard Sardella MLO.100007700/NMLS 233568
Stock indexes trading lower early this morning, the 10 yr. note yield dropped to 0.81% -3 bps from Friday. Stock market not happy with the reality that there isn’t going to be a stimulus package before the election, and the US and European reports that the virus is escalating quickly. Lockdowns are being considered in Italy, Spain, and France. In the US, the number of cases is escalating, with experts beginning to refer to the increase as wave two. According to comments from White House officials, the administration isn’t going to try to control the spread but work towards vaccines and treatments. New cases exceeded 83,000 on Friday, a record. It extended the increase with a new high of 85,317 infections a day later. More than 8.6 million Americans have contracted the virus so far, and the death toll now exceeds 225,000.
The U. of Oxford reporting its vaccine triggers lower adverse responses among the elderly. The experimental vaccines produce an immune response in both young and old adults, raising hopes of a path out of the gloom and economic destruction wrought by the novel coronavirus. British Health Secretary Matt Hancock said a vaccine was not yet ready, but he is preparing logistics for a possible roll-out mostly in the first half of 2021.
Amy Coney Barrett confirmed today? It looks like it. The Senate, on a 51-48 tally on Sunday, advanced Barrett’s nomination toward a final vote to be held on Monday.
There are a few economic reports this week, but the markets’ focus is the election now just eight days away. Polls widely favor Biden. However, Trump voters flock to his campaign outings in large numbers. Will the election result be as much of a shock as was Trump’s win over Hillary Clinton in 2016? The closer the election, the more uncertainty will keep markets in check.
At 9:30 am ET, the DJIA opened -296, NASDAQ -88, S&P -33. 10 yr. at 9:30 am 0.81% -3 bps. FNMA 2.0 30 yr. coupon at 9:30 am 10-3.06 +9 bps from Friday and +20 bps from 9:30 am Friday; the 2.5 coupon at 9:30 am +5 bps from Friday and +6 bps from 9:30 Friday.
At 10:00 am ET, Sept new home sales expected +1.016 mil, as reported sales +959K and August revised from 1.011 mil to 994K.
Presently, we see the improvements today as a short-term move; the 10 yr. yield would have to drop below 0.75% to change our outlook. Fundamentally, increasing concerns that inflation is more likely to increase, and the economic outlook is improving; both those assumptions don’t hold a lot of water so far.
PRICES @ 10:00 AM ET
10 yr. note: 0.81% -3 bp
5 yr. note: 0.35% -2 bp
2 Yr. note: 0.15% -2 bp
30 yr. bond: 1.60% -4 bp
Libor Rates: 1 mo. 0.156%; 3 mo. 0.216%; 6 mo. 0.249% 1 yr. 0.336% (1/23/20)
30 yr. FNMA 2.0: @9:30 103.06 +9 bp (+20 bp from 9:30 Friday)
30 yr. FNMA 2.5: @9:30 104.17 +5 bp (+6 bp from 9:30 Friday)
30 yr. GNMA 2.5: @9:30 104.08
Dollar/Yuan: $6.7103 +$0.0235
Dollar/Yen: 104.95 +0.22 yen
Dollar/Euro: $1.1822 -$0.0040
Dollar Index: 93.02 +0.25
Gold: $1905.10 -$0.10
Crude Oil: $3875 -$1.10
DJIA: 27,949 -386
NASDAQ: 11,525 -23
S&P 500: 3434 -31
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.