CHM Blog

The 10 yr. was unchanged overnight, at 8:30 am ET weekly jobless claims, a critical data point these days, expected at 880K declined to 870K, the previous week though was revised to 866K from 860K. There was nothing negative in the data, but the 10 yr. edged lower to 0.66%. The report's takeaway is that initial jobless claims remain at high levels that point to the ongoing challenges U.S. businesses face getting back on a pre-pandemic track. In the same period a year ago, initial jobless claims were 215,000. Claims are not going back to those levels for a year or more, if then. Early trading this morning in the MBS markets was better; at 8:45 am ET, MBS prices were +7 bps from yesterday's close. The stock indexes reacted to claims as being worse; an excuse media reported…splitting hairs. Claims are not declining, but not increasing either. The equity market is grinding out all of the over-valued stocks as well as increasing worries that Joe Biden has an increasing chance of winning, and increasing corporate taxes will follow. At 8:45 am ET, the DJIA down 178, NASDAQ -149, S&P -28 in futures trading.

Yesterday there was a lot for investors to ponder; here is the end of the day comments from Bloomberg.

• Over to you, lawmakers: the Fed pushed for more government aid.
• Trump predicted the Supreme Court will decide November's election.
• Disney delayed Black Widow, handing another setback to theaters. The attention switched back to the Fed today, as a slew of officials kept up their push for more government relief.
• Heading up the comments: Jerome Powell, who rebutted congressional suggestions that the Fed favored markets over people during the pandemic. As for its Main Street Lending Program, Powell & Co. have "done basically all of the things that we can think of," he said.
• The economic recovery will get much harder, with more permanent job losses unless there's additional fiscal support, Atlanta's Raphael Bostic added.
• A gaggle of other speakers made similar points: Americans need more government assistance. "We are still in a deep hole," Vice Chairman Richard Clarida told Bloomberg TV, words Loretta Mester echoed an hour later.
• Ouch. The Fed warnings hit stocks, which slumped to an eight-week low. The S&P 500 closed near the threshold that many investors consider to be a market correction, while the Nasdaq 100 tumbled more than 3%.
• And we told you we'd keep talking about the Supreme Court. In today's news, President Trump predicted that it'll decide the outcome of November's election, and argued the Senate should confirm his nominee to replace Ruth Bader Ginsburg to break any tie. "I think this will end up in the Supreme Court and I think it's very important that we have nine justices, and I think the system's going to go very quickly."

At 9:30 am ET, the DJIA opened -51 after being down 178, NASDAQ opened -45 after being down 149 at 8:45 am, the S&P also opened better -8. The 10 yr. note is at 0.67% unchanged. FNMA 2.0 30 yr. coupon at 9:30 am +9 bps from yesterday's close, and +12 bps from 9:30 am yesterday; FNMA 2.5 coupon at 9:30 am +5 bps from yesterday's close, and +5 bps from 9:30 am yesterday.

At 10:00 am ET, August new home sales roared higher, which was expected; sales at 1.011K with estimates at 875K; July sale also revised better from 901K to 965K. We will have the details this afternoon. No matter all of the details, the report much better than expected, and the outlook will continue to be strong with interest rates at these historically low levels. Interesting that MBS prices slipped a little from 9:30 am ET.

PRICES @ 10:00 AM ET

10 yr. note: 0.67% unch

5 yr. note: 0.28% unch

2 Yr. note: 0.14 % unch

30 yr. bond: 1.41% -1 bp

Libor Rates: 1 mo. 0.148%; 3 mo. 0.225%; 6 mo. 0.271%; 1 yr. 0.371% (9/23/20)

30 yr. FNMA 2.5: @9:30 104.69 +5 bp (+5 bps from 9:30 yesterday)

30 yr. FNMA 2.0: @9:30 103.11 +9 bp (+11 bps from 9:30 yesterday)

30 yr. GNMA 2.5: @9:30 104.28 -9 bp (+3 bp from 9:30 yesterday)

Dollar/Yuan: $6.8305 +$0.0201

Dollar/Yen: 105.45 +0.09 yen

Dollar/Euro: $1.1643 -$0.0018

Dollar Index: 94.54 +0.15

Gold: $1855.60 -$13.00

Crude Oil: $39.7 4 -$0.19

DJIA: 26,853 +90

NASDAQ: 10,712 +79

S&P 500: 3252 +15

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.