CHM Blog

SVB effect on the 10-YR - Daily Market Analysis March 13, 2023

March 13th, 2023 10:06 AM by Richard Sardella MLO.100007700/NMLS 233568

Daily Market Analysis

The failure of Silicon Valley Bank last week is reverberating this morning. The 10 year note began the day at 3.45% down -25 bps from Friday, Friday the 10 declined 22 bps. The 2 year note, the guide to what the Fed may do, last Thursday at 4.89%, this morning 4.02%. Another bank in turmoil, First Republic Bank also in trouble, its stock down 65% this morning. Another bank went down over the weekend, Signature Bank in New York. Pershing Square founder Bill Ackman said more banks will likely fail. “The investors who didn’t adequately oversee their banks will be zeroed out and the bondholders will suffer a similar fate,” turmoil reigns this morning.

There is strong selling in other questioned banks.

Regional lenders dominate the leader board for most-sold stocks in the US premarket:

First Republic Bank sank 65%

Western Alliance Bancorp lost 60%

PacWest Bancorp was down 46%

Finwise Bancorp tumbled 40%

Zions Bancorp. slid 24%

Metropolitan Bank dropped 23%

BankUnited Inc. was off 21%

Inflation data was going to be the focus this week until the bank issue, 50 bp increase in the FF rate had gained momentum, now the Fed may not move rates at all. It will require time for investors and traders to get a handle on how deep the banking system may be impacted. Last Friday most believed SVB was an outlier, today not much confidence in that view. The President spoke at 9 am assuring depositors their money is safe.

At 9:30 am the DJIA opened -261, NASDAQ -94, S&P -38. The 10 year 3.48% -21 bp. FNMA 6.0 30 year coupon +63 bps, +60 bp from 9:30 am Friday; 5.5 coupon +83 bps and +53 bp from 9:30 am Friday.

Uncertainty and volatility will dominate this week. The FOMC next week now in question. Regulators are going to be all over other banks. Markets sitting on a knife edge this morning. In the longer outlook this situation won’t likely last long. The Fed and interest rate increases will keep traders edgy.

PRICES @ 10:00 AM

10 yr note: 3.50% -20 bp

5 yr note: 3.66% -30 bp

2 Yr note: 4.15% -45 bp

30 yr bond: 3.62% -9 bp

Libor Rates: 1 mo 4.799%; 3 mo 5.138%; 6 mo 5.428%; 1 yr 5.738% (3/10/23)

30 yr FNMA 6.0: @9:30 am 101.59 +63 bp (+40 bp from 9:30 am Friday)

30 yr FNMA 5.5: @9:30 am 100.53 +83 bp (+53 bp from 9:30 am Friday)

30 yr GNMA 5.5: @9:30 am 100.19 +17 bp (-6 bp from 9:30 am Friday)

Dollar/Yuan: $6.8645 -$0.0418

Dollar/Yen: 132.92 -2.08 yen

Dollar/Euro: $1.00703 +$0.0062

Dollar Index: 103.86 -0.72

Gold: $1913.30 +$46.10

Bitcoin: 22,599 +1202

Crude Oil: $73.77 -$2.91

DJIA: 31,984 +74

NASDAQ: 11,143 +4

S&P 500: 3854 -8

About Richard Sardella

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.

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 March 13th, 2023 10:06 AM



My Favorite Blogs:

Sites That Link to This Blog: