September 16th, 2021 8:55 AM by Richard Sardella MLO.100007700/NMLS 233568
Weekly claims were expected at +315K, as released +332K +20K frm the previous week. The unexpected increase due to Hurricane Ida in Louisiana, Overall job gains are occurring so we don’t give too much attention to the increase. Have to take weekly claims looking at a wider number of weeks.
August retail sales were substantially better than forecasted because it was incorrectly believed consumers are slowing down. Instead sales were strong. The consensus for sales -0.8%, as reported +0.7%; when autos are subtracted the estimates were -0.1%, as reported +1.8%. Yesterday JP Morgan Chase economists revised their outlook projected gross domestic product to expand at a 5% annual rate in July through September, down from a prior estimate of 7%, citing lower demand and production shortages, particularly in the car industry. Economists believe retail sales could recover quickly as more Americans become vaccinated and feel safe again to venture out, and as product shortages ease.
The final data released at 8:30 am ET; Sept Philadelphia Fed business index, expected at 19.2 frm 19.4 in August, another stronger report. The index jumped to 30.7.
The initial reaction to the 8:30 am releases sent the 10 yr note to 1.34% +4 bps and MBS prices down 20 bps on the 2.0 coupon and -14 on the 2.5 FNMA 30 yr coupon.
At 9:30 am the DJIA opened +39, NASDAQ -51, S&P -5. 10 yr 1.34% +4 bps. FNMA 2.0 coupon -22 bps and -31 bps frm 9:30 am yesterday; FNMA 2.5 -17 bps and -30 bps frm 9:30 am yesterday.
We are not looking for any major changes in interest rates until at least when the FOMC policy statement and Powell’s press conference next Wednesday. The daily trading in the stock market is a MBS trading factor; these days when the key indexes decline it tends to support the bond and mortgage markets, although the underlying concerns over potential inflation, the economy, and what the Fed will announce next Wednesday about its tapering plans dominate the direction of interest rates in the broader perspective. In the prices section below MBS prices are from 9:30 am; by 10:00 am MBS prices 8 bps lower than at 9:30 am.
PRICES @ 10:00 AM ET
10 yr note: 1.35% +5 bp
5 yr note: 0.84% +4 bp
2 Yr note: 0.22% +1 bp
30 yr bond: 1.90% +3 bp
Libor Rates: 1 mo 0.084%; 3 mo 0.120%; 6 mo 0.148%; 1 yr 0.221% (9/15/21)
30 yr FNMA 2.0: @9:30 am 101.08 -22 bp (-31 bp frm 9:30 am yesterday)
30 yr FNMA 2.5: @9:30 am 103.64 -17 bp (-30 bp frm 9:30 am yesterday)
30 yr GNMA 2.5: @9:30 am 103.17 -12 bp (-24 bp frm 9:30 am yesterday)
Dollar/Yuan: $6.4516 +$0.0191
Dollar/Yen: 109.38 unch
Dollar/Euro: $1.1765 -$0.0050
Dollar Index: 92.91 +0.36
Gold: $1755.20 -$39.60
Bitcoin: 47,786 -289
Crude Oil: $72.20 -$0.41
DJIA: 34,736 -78
NASDAQ: 15,084 -76
S&P 500: 4469 -16
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.