CHM Blog

Bond markets began unchanged this morning as the FOMC meeting begins, stock indexes in futures markets continue to climb.

ADP, the payroll folks, announced a major change to the way monthly jobs are released. In the past ADP would report private jobs on a monthly basis the Wednesday prior to the monthly BLS employment report on the first Friday of each month. From now on ADP will report a four-week average of private jobs with a two-week lag and the release, instead of Wednesday will occur on the Tuesday prior to BLS employment report. The change will include a four-week average of private jobs but lags by two weeks the monthly private job total.

This morning ADP reported the four-week average of private jobs through 10/11 increased 14,250 jobs over the four-week period totaling 55K new private jobs compared with a loss of 32K reported for September in the monthly release on September 5th, when ADP reported private jobs lost jobs in September it fueled increased concern at the Fed that the employment sector was slowing and at his press conference after the September FOMC meeting Powell indicated the Fed would put additional attention to employment and a little less on inflation as a guide to rate cuts. The new way ADP will report didn’t generate any market reaction. This report is the best we have since the government shutdown.

Markets remain convinced the Fed will cut rates 25 bps tomorrow and another 25 bps at the December.

August Case/Shiller home price index month/month expected -0.1% increased 0.2%, year/year 20 city thought to be +1.0% increased 1.6%.

At 9:30 am ET the DJIA opened +308, NASDAQ +143, S&P +19, 10 year note 4.00% +2 bps. FNMA 5.5 30 year coupon at 9:30 am +5 bps from yesterday’s close and +12 bps from 9:30 am yesterday.

At 10 am the Conference Board released October consumer confidence index expected at 93.4 from 94.2. The Conference Board Consumer Confidence Index inched down by 1.0 point in October to 94.6 (1985=100) from an upwardly revised 95.6 in September. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—gained 1.8 points to 129.3. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—declined by 2.9 points to 71.5. Expectations have been below the threshold of 80 that typically signals a recession ahead since February 2025. The cutoff date for preliminary results was October 19, 2025.

At 1 pm Treasury will auction $44B of 7 year notes; the 2 and 5 year auctions yesterday met with generally reasonable demand.

PRICES @ 10:00 AM

10 year note: 4.00% +2 bp

5 year note: 3.63% +1 bp

2 year note: 3.51% +2 bp

30 year bond: 4.56% +1 bp

30 year FNMA 5.5: @9:30 am 101.34 +5 bp (+12 bp from 9:30 am yesterday)

30 year FNMA 6.0: @9:30 am 102.40 +3 bp (+4 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 101.03 +2 bp (+6 bp from 9:30 am yesterday)

Dollar/Yen: 152.32 -0.55 yen

Dollar/Euro: $1.1634 -$0.0011

Dollar Index: 98.91 +0.12

Gold: $3,940.40 -$78.20

Bitcoin: 115,088 +172

Crude Oil: $60.64 -$0.67

DJIA: 47,755 +211

NASDAQ: 23,711 +73

S&P 500: 6875 -1 bp

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

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