Archive | December 2015

Market Update 12/23/2015

MBS are down -3/32 (FNMA 30-yr 3.5 at 102.26), around 10/32 lower than yesterday at this time. Unfavorable repricing took place yesterday.

Stocks have moved higher and MBS have declined this morning. The Dow is up 125 points. New Home Sales and Consumer Sentiment will be released at 10:00 et.

November Durable Orders were flat from October, which was better than the consensus for a decline of 0.6%. Excluding the most volatile components, the results were close to expectations. Core PCE inflation rose 0.1% from October, matching expectations, and it was 1.3% higher than a year ago. This is the Fed’s preferred inflation indicator. Personal Income also matched expectations with an increase of 0.3% from October.

MArket Update 12/22/2015

MBS are down -4/32 (FNMA 30-yr 3.5 at 103.04), around 5/32 lower than yesterday at this time. Early investors may have priced at higher levels.

MBS have drifted lower this morning. Third quarter GDP was revised slightly lower from 2.1% to 2.0%, matching expectations. The Dow is up 25 points. Existing Home Sales will be released at 10:00 et.

Dec 17 2015 MARKET UPDATE

MBS are up +6/32 (FNMA 30-yr 3.5 at 103.00), around 4/32 higher than yesterday at this time.

It has been a volatile morning following yesterday’s big Fed announcement. The Philly Fed regional manufacturing index declined to -5.9, well below the consensus of 1.0, and the lowest reading since February 2013. Weekly Jobless Claims declined to 271K, very close to the consensus of 270K. The Dow is down 10 points. Leading Indicators will be released at 10:00 et.

Dec 16th 2015 MARKET UPDATE

MBS are down -1/32 (FNMA 30-yr 3.5 at 102.28), around 3/32 higher than yesterday at this time.

It has been a quiet morning ahead of today’s big Fed announcement. The Dow is up 100 points. The highly anticipated Fed statement will be released at 2:00 et. This will be followed by Fed Chair Yellen’s press conference at 2:30 et. If the Fed raises the federal funds rate as widely expected, investors will be looking for guidance about the pace of future rate hikes.

Mixed economic data had little impact this morning. November housing starts jumped 11% from October to an annual rate of 1173K, above the consensus of 1140K, and they were 17% higher than a year ago. Single-family starts rose to the highest level since January 2008. Building permits also exceeded expectations. November industrial production fell 0.6%, worse than the consensus for a decline of just 0.2%.

Dec 11th 2015 Market Update

MBS are up +8/32 (FNMA 30-yr 3.5 at 103.12), around 3/32 higher than yesterday at this time. Unfavorable repricing took place yesterday. Early investors may have priced at lower levels.

A decline in stocks has lifted MBS this morning. The Dow is down 250 points. Consumer Sentiment will be released at 10:00 et.

November Retail Sales rose 0.2% from October, below the consensus for an increase of 0.3%. Excluding the volatile auto component, Retail Sales rose 0.4%, above the consensus for an increase of 0.3%. November PPI rose 0.3% from October, above the consensus for a decrease of 0.1%, and it was 1.1% lower than one year ago. Core PPI, which excludes food and energy, increased 0.3%, above the consensus for an increase of 0.1%. Core PPI was 0.5% higher than one year ago.

Dec 5th 2015 MARKET UPDATE

MBS are up +3/32 (FNMA 30-yr 3.5 at 103.06), around 7/32 lower than yesterday at this time. Unfavorable repricing took place yesterday. Early investors may have priced at lower levels.

It has been an interesting morning. Following the release of the Employment data, MBS prices dropped to a low of -8/32 and then quickly recovered. Against a consensus forecast of 190K, the economy added 211K jobs in November. Upward revisions to prior months added another 35K. The Unemployment Rate remained at 5.0%, as expected. Average Hourly Earnings, a proxy for wage growth, also matched expectations and were 2.3% higher than a year ago. The solid labor market data made investors nearly certain that the Fed will hike rates at the next meeting on December 16. Separately, the October Trade Deficit was larger than expected. The Dow is up 150 points. No more economic data will be released today.

Market Update 12/3/2015

LOCK IN NOW BEFORE RATES GO UP.  Fed NEWS yesterday was positive towards a Dec rate hike and the ECB is also effecting rates Domestically:

MBS are down -8/32 (FNMA 30-yr 3.5 at 103.13), around 10/32 lower than yesterday at this time. Early investors may have priced at higher levels.

This morning, the European Central Bank (ECB) announced additional stimulus measures, but the package was smaller than expected. The ECB cut rates and will extend its bond purchase program until at least March 2017 (from its original end date of September 2016), but the quantity of monthly purchases will remain at $60 billion euros. Investors were looking for a large expansion of this figure. The smaller than expected package means less added demand for bonds, and bond yields around the world moved higher on the news. The Dow is down 40 points. ISM Services and Factory Orders will be released at 10:00 et. Fed Chair Yellen will be testifying before Congress at 10:00 et as well.

HAPPY Dec 1st 2015

MBS are up +1/32 (FNMA 30-yr 3.5 at 103.21), around 6/32 higher than yesterday at this time. Early investors may have priced at lower levels.

MBS have recovered early losses this morning, ahead of today’s economic data. The Dow is up 150 points. ISM Manufacturing and Construction Spending will be released at 10:00 et.