CHM Blog

Weekly jobless claims this morning were expected to have increased 7K from the week before, claims forecasts were 238K down from 231K the prior week. Claims were 218K, -14K from the week before. Looking at the last two weeks of claims they have declined a total of 47K instead of increasing as were expected, claims the lowest in two months. Continuing claims at 1.926 million were higher than 1,920 million in the prior week.

Q2 final GDP a stunner, expected at 3.3%, unchanged from the advance release last month, reported growing at 3.8%. It was the strongest performance going back to Q3 2023. The increase reflected an upward revision to consumer spending and investment. PCE rose 2.5% (versus 1.6% in the second estimate), led by a bigger revision for services (2.6% versus 1.2%) while spending on goods remained robust (2.2% versus 2.4%). Fixed investment was also revised higher (4.4% versus 3.3% in the second estimate), including equipment (8.5% versus 7.4%), intellectual property products (15% versus 12.8%) and structures (-7.5% versus -8.9%). Residential investment however, fell more (-5.1% versus -4.7%). Also, government consumption shrank slightly less (-0.1% versus -0.2%). The contribution from net trade was revised lower, as exports declined at a faster pace (-1.8% versus -1.3%) and imports fell 29.3% (versus -29.8%).

August durable goods orders also stronger than forecasts; +2.9% month/month against estimates of -0.5%; excluding transportation orders estimates were -0.2% but increased 0.4%. It marked the first increase in goods orders in three months, led by transport equipment (+7.9%), notably defense aircraft and parts (+50.1%) and nondefense aircraft and parts (+21.6%). New orders were up 0.4% when excluding transportation, and 1.9% when excluding defense. Meanwhile, orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose by 0.6% in August, after a 0.8% increase in the prior month.

The advance look at August trade deficit was better than forecasts -$85.5B against -$94.4B estimates. July deficit revised from -$103.6B to -$102.8B.

At 9:30 am ET the DIA opened -130, NASDAQ -205, S&P -42. 10 year note at 4.18% +3 bps after climbing to 4.20% on the initial reaction to weekly claims. FNMA 5.5 30 year coupon at 9:30 am -14 bps from yesterday’s close and -16 bps from 9:30 am yesterday.

At 10 am August existing home sales were estimated at 3.950 million, reported at 4.00 million.

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

High volatility this morning in the bond and mortgage markets.

PRICES @ 10:00 AM

10 year note: 4.18% +3 bp

5 year note: 3.77% +6 bp

2 year note: 3.66% +5 bp

30 year bond: 4.77% +2 bp

30 year FNMA 5.5: @9:30 am 100.77 -14 bps (-16 bps from 9:30 am yesterday) (-19 bps at 10 am, -21 from 9:30 am yesterday)

30 year FNMA 6.0: @9:30 am 102.12 -6 bp (-3 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 100.68 -10 bp (-12 bp from 9:30 am yesterday)

Dollar/Yen: 149.32 +0.42 yen

Dollar/Euro: $1.1694 -$0.0044

Dollar Index: 98.15 +0.28

Gold: $3,756.10 -$12.00

Bitcoin: 111,290 -2173

Crude Oil: $64.14 -$0.85

DJIA: 45,919 -202

NASDAQ: 22,225 -272

S&P 500: 6580 -58

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.

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.