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Daily Market Analysis October 7, 2021

October 7th, 2021 9:15 AM by Richard Sardella MLO.100007700/NMLS 233568


Daily Market Analysis

The debt default that would cause Treasury to default on its debt on Oct 18th is going to avoided, not a surprise but investors are sighing relief. Democrats appeared to be on the verge of accepting a proposal from Senate Republican leader Mitch McConnell to raise the debt limit by a specific amount that would be sufficient to tide the Treasury over until December, when Congress would have to vote again to avoid a default. While the immediate threat of a default is receding, the deal would merely delay the fight to December.

Inflation concerns are not slowing; in fact the more information we get the more support there is that inflation will continue. Food prices, energy prices, prices for increasingly large numbers of products continue to increase. Where we are now is how long the supply chain disruptions, the shortage of coal and natural gas, and concerns over labor markets will go on. Workers still resisting returning, although weekly claims are declining.

At 9:30 am ET the DJIA opened +300, NASDAQ +125, S&P +36. 10 yr. 1.55% +3 bps. FNMA 2.5 30 yr. coupon -11 bps and -8 bps from 9:30 am yesterday.

At 3 pm this afternoon August consumer credit data will be reported; the total expected to be $18.1B up from $17.0B in July. Our focus is directed to the use of credit cards (revolving credit); it provides another read on how consumers are actually feeling about the economic outlook (willing to borrow) along with the two consumer measurements each month.

Tomorrow Sept employment data; current consensus for job growth 475K, private jobs 445K, unemployment rate 5.1% down from 5.2% in August, annual average hourly earnings +4.6% up from 4.3% in August. Yesterday ADP released its private jobs data, prior to the report estimates were for job increases 428K, as reported +568K. As you all know, the employment data generally causes volatility as the releases usually differ from what economists thought.

The 10 yr. note at its next upside technical support at 1.55%; should hold today ahead of tomorrow’s employment report. Today as long as the stock indexes hold early gains interest rates won’t decline, expect a quiet day in rate markets.

PRICES @ 10:00 AM ET

10 yr. note: 1.56% +3 bp

5 yr. note: 1.00% +2 bp

2 Yr. note: 0.31% unch

30 yr. bond: 2.12% +3 bp

Libor Rates: 1 mo. 0.087%; 3 mo. 0.124%; 6 mo. 0.156%; 1 yr. 0.241% (10/6/21)

30 yr. FNMA 3.0: @9:30 am 104.45 -5 bp (-3 bp from 9:30 am yesterday)

30 yr. FNMA 2.5: @9:30 am 102.94 -11 bp (-8 bp from 9:30 am yesterday)

30 yr. GNMA 2.5: @9:30 am 102.66 -66 bp (-6 bp from 9:30 am yesterday)

Dollar/Yuan: China will be closed until Monday

Dollar/Yen: 111.44 +0.03 yen

Dollar/Euro: $1.1562 +$0.0003

Dollar Index: 94.23 -0.04

Gold: $1756.30 -$5.50

Bitcoin: 54,650 -292

Crude Oil: $76.78 -$0.65

DJIA: 34,871 +454

NASDAQ: 14,698 +196

S&P 500: 4421 +58

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 7th, 2021 9:15 AM

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