Archive | August 2015

Market Update 8/31/2015

MBS are down -5/32 (FNMA 30-yr 3.5 at 103.20), around 9/32 below morning levels, and at the low for the day. Unfavorable repricing was seen. A decline in stocks lifted MBS this morning, but month-end volatility caused MBS to drift lower later in the session. The Dow is down 120 points. Tomorrow, ISM Manufacturing and Construction Spending will be released at 10:00 et. China’s PMI manufacturing data also will be released.

homechart1441051750

Morning Update 8/31/2015

MBS are up +4/32 (FNMA 30-yr 3.5 at 103.29), around 1/32 higher than Friday at this time. Some unfavorable repricing took place Friday.

A decline in stocks has helped MBS this morning. Chicago PMI declined to 54.4, very close to the consensus of 54.5. The Dow is down 150 points. No more economic data will be released today.

TGIF 8/28/2015

MBS are up +6/32 (FNMA 30-yr 3.5 at 103.29), around 8/32 higher than yesterday at this time. Some favorable repricing took place yesterday.

While there were no surprises in today’s economic data, MBS have climbed higher this morning. The July Core PCE price index rose 0.1% from June, matching the consensus, and it was just 1.2% higher than a year ago. The Fed’s target level for core inflation is 2.0%. Personal Income also matched expectations. The Dow is down 75 points. Consumer Sentiment will be released at 10:00 et.

Market update 8/27/2015

MBS flat on the day (FNMA 30-yr 3.5 at 103.23), around 4/32 below mid-day highs, Stronger than average demand for the 7-year Treasury auction lifted MBS to their highs. A rally in stocks late in the day took away some of the gains.  The Dow is up 300 points. July Pending Home Sales rose 0.5% from June, a little below the consensus for an increase of 1.0%, and they were 7% higher than a year ago. Tomorrow, Core PCE, Personal Income, and Consumer Sentiment will be released.

Freddie Mac reported that average mortgage rates fell in the week through August 27, with 30-yrs hitting 3.84%, from 3.93% the prior week. Keep in mind, though, that the survey takes place early in the week. If measured today, mortgage rates would be higher than what was reported.

Morning Update 8/27/2015

MBS are down -1/32 (FNMA 30-yr 3.5 at 103.21), around 3/32 lower than yesterday at this time. First some favorable and later some unfavorable repricing was seen yesterday.

It has been a volatile morning. Stronger than expected GDP revisions caused a brief decline in MBS, but they quickly recovered. Second quarter GDP was revised higher from 2.3% to 3.7%, well above the consensus of 3.2%. Looking at the components, though, the news was mixed. Much of the strength during the second quarter came in areas which are not likely to be repeated in coming quarters, such as increased inventories. The early consensus for third quarter GDP growth is below 2.0%. Separately, weekly Jobless Claims declined a little to 271K, which was very close to expectations. The Dow is up 200 points. Pending Home Sales will be released at 10:00 et. The results from the 7-yr Treasury auction will come out around 1:00 et.

Morning Update 8/26/2015

MBS are down -9/32 (FNMA 30-yr 3.5 at 103.24), around 10/32 lower than yesterday at this time. Unfavorable repricing was seen yesterday.

It has been a volatile morning. A stock market rally and stronger than expected economic data have been negative for MBS. July Durable Orders rose 2.0% from June, far above the consensus for a decline of 0.5%. Excluding the volatile transportation component, durable orders rose 0.6%, which was a little stronger than expected. The Dow is up 300 points. No more economic data will be released today. The results from the 5-yr Treasury auction will come out around 1:00 et.

Morning Update 8/25/2015

MBS are down -4/32 (FNMA 30-yr 3.5 at 104.02), around 11/32 lower than yesterday at this time. Unfavorable repricing was seen yesterday.

This morning, an interest rate cut in China helped the stock market. Investors reversed direction from yesterday and shifted some assets from bonds back to stocks. Similar to the last couple of sessions, the movement in MBS prices has been significantly smaller than in Treasury prices both on the way up and on the way down. The Dow is up 300 points. New Home Sales and Consumer Confidence will be released at 10:00 et. The results from the 2-yr Treasury auction will come out around1:00 et.

The June S&P/ Case-Shiller 20-city home price index was 5% higher than a year ago.

Mid Day Update 8/24/2015

MBS are up +6/32 (FNMA 30-yr 3.5 at 104.07), around 6/32 below 9:45 et levels, but 4/32 above the lows. Unfavorable repricing was seen. Another loss of more than 500 points for the Dow stock index helped MBS. Oil prices declined to the lowest level since February 2009. No economic data was released today. The Dow is down 590 points for its lowest close in 18 months.Tomorrow, New Home Sales and Consumer Confidence will be released at 10:00 et. The results from the 2-yr Treasury auction will come out around 1:00 et.

homechart1440447140

BAD day for the DOW= Great day for interest rates 8/24/2015

MBS are up +12/32 (FNMA 30-yr 3.5 at 104.13), around 13/32 higher than Friday at this time, but 4/32 below the morning highs. Some favorable repricing was seen Friday. Early investors may have priced in a wide range from +8/32 to +16/32.

It has been a volatile morning. The Dow is down 700 points, after being down almost 1,100 points at one time this morning. Concerns about slowing economic growth have continued to hurt global stock markets. Investors have shifted some assets from stocks to bonds. No economic data will be released today.

homechart1440425360

OUCH!!!

Stocks have declined sharply with the Dow down nearly 500 points. The stock selloff has had little impact on MBS prices today, however. MBS are up +3/32, around 4/32 above morning levels.

S&P 500 1982.57
-53.16 -2.61%
DJIA 16561.90
-428.79 -2.52%
VIX 26.35
7.21