CHM Blog

Yesterday the technical correction began after continual increases. The 10 year note -4 bps, MBS prices +34 bps. Hadn’t seen that kind of near-term excess since a year ago. This morning the improvement continues, at 9 am ET the 10 year note yield down another 5 bps and MBS prices up 26 bps.

August PCE released at 8:30 am: month/month +0.4% against estimates of +0.5% but compared to July the month/month increased from +0.2%; year/year expected +3.5% as reported +3.5% up from +3.4% in July. Looking at the more important core PCE, month/month expected +0.2% increased 0.1% and down from +0.2% in July, year/year core estimates +3.9% reported at +3.9% but as with the overall inflation dipped from July’s 4.2%. The increase month/month in August driven largely by increasing energy prices (crude oil). Crude at $93.00 early this morning, up $1.29.

August personal income increased 0.4% as expected, personal spending thought to be +0.5% increased 0.4%.

A government shutdown is looming, the deadline is Saturday at 12 pm. Hopefully it won’t last long. If a shutdown were to last even a few weeks, it will disrupt data flows and confuse the Fed and pundits about the economy’s pace. The debt ceiling issue resurrects every year or two.

U.S. homes in 2023 are collectively valued at around $52 trillion, a 50% increase since January 1st, 2020, according to an analysis by Zillow. The top five states with the housing markets that have increased the most in value over that time include California, Florida, New York, Texas, and New Jersey.

At 9:30 am the DJIA opened +214, NASDAQ +133, S&P +31. 10 year at 9:30 am 4.52% -6 bps. FNMA 6.0 30 year coupon at 9:30 am +34 bps and +80 bps from 9:30 am yesterday.

At 9:45 am Sept Chicago purchasing managers index expected at 47.9, as reported the index dropped to 44.1, deeper in contraction and down from 48.7 in August.

At 10 am the final Sept University of Michigan consumer sentiment index estimated at 67.7 the same as mid-month. The index 68.1.

PRICES @ 10:00 AM

10 year note: 4.52% -6 bp

5 year note: 4.57% -5 bp

2 year note: 5.04% -3 bp

30 year bond: 4.65% -5 bp

30 year FNMA 6.0: @9:30 am 99.08 +34 bp (+80 bps from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 97.05 +33 bp (+80 bps from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 97.41 +27 bp (+63 bps from 9:30 am yesterday)

Dollar/Yuan: $7.2970 -$0.0034

Dollar/Yen: 149.24 -0.07 yen

Dollar/Euro: $1.0587 +$0.0019

Dollar Index: 105.94 -0.29

Gold: $1889.60 +$11.00

Bitcoin: 26,931 -156

Crude Oil: $91.57 -$0.14

DJIA: 33,772 +105

NASDAQ: 13,364 +165

S&P 500: 4327 +27

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.