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Daily Market Analysis October 26, 2021

October 26th, 2021 8:52 AM by Richard Sardella MLO.100007700/NMLS 233568


Daily Market Analysis

Stock indexes began better early today; the 10 yr. note unchanged and MBS prices -3 bps. Yesterday MBS prices increased 22 bps while the 10 ended unchanged on the day.

The spending package, still looks like a way to go before a deal can be achieved. Biden wanted to get it done before he leaves for Europe, that doesn’t appear likely. Democrats are working to wrap up negotiations over their social-spending and climate bill, hoping by this weekend to resolve disagreements on issues including tax policy and healthcare. One thing that has surfaced, the Trump tax cuts won’t be reversed, no support in either party. That the tax cuts will remain is somewhat of a surprise, it was widely assumed that corporate taxes would increase from 21% to 26%, prior to Trump the tax was 35%. Now awaiting Senate Dems to release their plan to fund what’s shaping up to be a near-$2 trillion social spending package. Pres. Biden continues to say the spending bill will not add to the US debt. Given historical support among Republicans for a corporate rate in the mid-20s, and the 2017 legislation’s unpopularity, Democrats had assumed a rate hike for companies would be the easiest part of the plan.

At 9 am August Case/Shiller home price index expected +1.3%, reported +1.4%; yr./yr. +19.8% unchanged from July. FHFA also said August home prices increased 1.0% on forecasts of 1.3%, yr./yr. +18.5%.

At 9:30 am the DJIA opened 92, NASDAQ +80, S&P +15. 10 yr. 1.63% unchanged. FNMA 2.5 30 yr. coupon at 9:30 am -5 bps from yesterday but +12 bps from 9:30 am yesterday.

At 10 am Sept new home sales expected at 760K increased to 800K but August sales revised from 740K to 702K.

October consumer confidence index; The Conference Board Consumer Confidence Index increased in October, following declines in the previous three months. The Index now stands at 113.8 (1985=100), up from 109.8 in September. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—rose to 147.4 from 144.3 last month. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—improved to 91.3 from 86.7. Consumers’ appraisal of current business conditions was mixed in October. 18.6% of consumers said business conditions are “good,” down from 19.1%. On the other hand, 24.9% of consumers said business conditions are “bad,” down from 25.3%.Consumers’ assessment of the labor market was moderately more favorable. 55.6% of consumers said jobs are “plentiful,” down from 56.5%. Conversely, 10.6% of consumers said jobs are “hard to get,” down from 13.0%.

MBSs are decreasing somewhat from 9:30 am, at 10 am -9 bps down from -5 bps at 9:30 am. Inflation fears increasing, still looking for 1.74% for the 10 before technical support.

PRICES @ 10:00 AM

10 yr. note: 1.64% unch

5 yr. note: 1.19% +2 bp

2 Yr. note: 0.46% +2 bp

30 yr. bond: 2/08 -1 bp

Libor Rates: 1 mo. 0.0877%; 3 mo. 0.134%; 6 mo. 0.177%; 1 yr. 0.329% (10/25/21)

30 yr. FNMA 3.0: @9:30 am 104.30 -2 bp (+14 bp from 9:30 am yesterday)

30 yr. FNMA 2.5: @9:30 am 102.34 -5 bp (+14 bp from 9:30 am yesterday)

30 yr. GNMA 2.5: @9:30 am 102.19 -9 bp (+3 bp from 9:30 am yesterday)

Dollar/Yuan: $6.3825 -$0.0033

Dollar/Yen: 114.17 +0.46 yen

Dollar/Euro: $1.1610 unch

Dollar Index: 93.86 +0.04

Gold: $1793.80 -$13.00

Bitcoin: 62,006 -802

Crude Oil: $83.80 +$0.04

DJIA: 35,830 +90

NASDAQ: 15,349 +123

S&P 500: 4593 +26

About Richard Sardella

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.

About This Report And Disclosure Information

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.

Posted by Richard Sardella MLO.100007700/NMLS 233568 on October 26th, 2021 8:52 AM

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