interest rate trends: Daily Market Report 6/1/20 - 06/01/20 09:14 AM We have a few manufacturing reports today, which the first is Markit Manufacturing PMI remained Unchanged at 39.8 in May; and it's counter-part, the ISM Manufacturing Index rose from 41.5% to 43.1% in May. Below 50 on these indexes mean contraction. Construction Spending dropped 2.9% in April, which was lower than the 6.8% drop forecasted. Stocks are in Positive Territory this morning on the ISM data. China reported positive manufacturing data on their Caixin index, which showed it just above 50 (expanding territory). Tensions are growing between the 2, as US is removing Special Status on Hong Kong; and China … (2 comments)

interest rate trends: Daily Market Report 5/29/20 - 05/29/20 10:25 AM Personal Income rose 10.5% in April. We think this anomaly is due to the disparity based on the lower pay scale employees losing work during the pandemic. Consumer Spending dropped 13.6% in April, as much of the economy was closed. The Personal Consumption Expenditure (PCE) dropped 0.5% in April, while it's YoY dropped from 1.3% to 0.5%; similarly, the Core PCE (which removes food & energy; and Fed's favorite gauge for inflation) dropped 0.4%, and it's YoY dropped from 1.7% to 1.0%. The Fed's target rate for Core PCE is 2.0%, which this new numbers greatly distances from it. The … (1 comments)

interest rate trends: Daily Market Report 5/28/20 - 05/28/20 09:44 AM Initial Jobless Claims continued the lower trend when it was reported that 2.12 million people applied for unemployment benefits last week, which is down from 2.45 million the week prior. The 2nd look at the Q1 GDP worsened, going from -4.8% to -5.0%. We'll get our final number for GDP next month. Durable Goods Orders dropped 17.2% in April; however, when you remove Transportation from the equation, then it dropped 7.4%. Interruptions in the Housing Market really showed in April, as NAR reported that Pending Home Sales dropped by 21.8%. This is the biggest decline on record. Stocks are Up … (1 comments)

interest rate trends: Daily Market Report 5/27/20 - 05/27/20 10:25 AM We'll be able to get a better view of the US Economy when the Fed releases their Beige Book around 11am PST today. This provides a Micro view of each region of the US. Stocks started the morning off in Positive Territory; however, Technology Stocks started to go into the Red, as tensions continue to mount with China and the concerns with protests in Hong Kong. This brought the NASDAQ into Negative Territory. MBS also, started in the Red and just above it's 50 DMA this morning, but has since moved upwards (Up 13bps currently) against it's 25 DMA now. … (2 comments)

interest rate trends: Daily Market Report 5/26/20 - 05/26/20 08:56 AM The Case Shiller HPI rose from 4.2% YoY in February to 4.4% in March; however, the FHFA HPI dropped from 6.1% in February to 5.9% in March. Consumer Confidence began to rise in May, as it went from 85.7 to 86.6. Also, a bit of a surprising report, is New Home Sales, which went from 619k annualized units in March; with forecasts calling for 480k units in April, but the actual number of annualized units in April rose to 623k. Stocks are well into Positive Territory this morning, as optimism grows on possible vaccines and data reporting improvement in the … (2 comments)

interest rate trends: Daily Market Report 5/22/20 - 05/22/20 09:50 AM There are no economic data to report today. Stocks are Down this morning after reflecting on this week's events and heading into a long weekend. President Trump was asked a question regarding a possible 2nd wave, which he responded that we'll put out fires, but we won't be closing the economy. MBS is currently Down 2bps, so Mortgage Rates continue to be Unchanged. Yields are Down to 0.65% and trying to remain above it's 25 DMA. If it breaks below it, then it could be a good sign to push MBS upwards and see improved pricing in Mortgage Rates. Fingers … (1 comments)

interest rate trends: Daily Market Report 5/21/20 - 05/21/20 11:32 AM Initial Jobless Claims continued it downward trend in people applying for unemployment benefits, as it dropped from 2.69 million in last week's report to 2.44 million in this week's report. The Philly Fed improved from -56.6 April to -43.1 in May. This index reports the activity level of manufacturing in the Philadelphia area. Meanwhile, Markit PMI released their 2 reports (Manufacturing and Services) for May. Markit Manufacturing PMI improved from 36.1 in April to 39.8 in May; and Markit Services PMI improved from 26.7 to 36.9. These last few indices indicate that we bottomed out in April and on way … (2 comments)

interest rate trends: Daily Market Report 5/20/20 - 05/20/20 09:51 AM The FOMC Minutes will be released around 11am PST today, but we don't anticipate any news from these notes. Stocks are Up this morning on good earnings reports from retailers (like Target and Lowes). MBS is currently Up 11bps, and yesterday, it closed Up 27bps, so you can expect better pricing with Mortgage Rates today. The Fed is purchasing up to $4.5 Billion of MBS today. There is a Bond Auction today, so it's possible to have an adverse reaction to the Market, if it isn't successful. Yields are currently sitting at 0.71%
If you're located in California and looking … (0 comments)

interest rate trends: Daily Market Report 5/19/20 - 05/19/20 09:48 AM As expected, Housing Starts dropped in April, as it was reported at 891k annualized units (just under forecasts). Building Permits (future Housing Starts) also, dropped in April to 1.074 million (better than forecasts) annualized units. Stocks are a bit Mixed, as the DOW is currently the only index in the Red. Both Fed Chair Powell and Treasury Secretary Mnuchin are scheduled to testify before Congress today. It's expected that they reiterate what they've previously stated in recent comments. Also, President Trump has threatened to permanently withhold funding to WHO. MBS is currently Up 11bps, so Mortgage Rates remain Unchanged. It … (0 comments)

interest rate trends: Daily Market Report 5/18/20 - 05/18/20 08:47 AM The NAHB Home Builders Index rose from a low of 30 in April to 37 in May. This index indicates the confidence level of Home Builders in the US on the Housing Market. Stocks are way Up this morning on news that Moderna Pharmaceuticals announced positive results for the vaccines during Phase One testing. The Fed's Chairman Powell made comments over the weekend that were very upbeat and indicated plenty of tools to help the economy. He indicated that he expects the economy to pick up later in the year, and it may be better than pre-pandemic. As a result … (2 comments)

interest rate trends: Daily Market Report 5/15/20 - 05/15/20 09:17 AM Retail Sales continued their decline in April, as they dropped 16.4%; and when you exclude "big ticket" items, like autos, then it dropped 17.2%. Manufacturing in the NY region improved some, but the number is still pretty bad, as the Empire State Index webt from -78.2 in April to -48.5 in May. Industrial Production continued to decline, as it dropped 11.2% in April; and the Capacity Utilization dropped down to 64.9%. Job Openings dropped from 7.0 million in February to 6.2 million in March. Consumer Sentiment improved in May, as it went from 71.8 in April to 73.7 in May, … (2 comments)

interest rate trends: Daily Market Report 5/14/20 - 05/14/20 08:19 AM The initial Jobless Claims for last week were a little higher than forecasts, but still lower than previous report, and came in at 2.98 million people applying for unemployment benefits for first time. This trend is lowering, but it's still disturbing to see so many apply, as it's estimated to have reached approximately 36.5 million people applying for unemployment over just the past 2 months. This should put us pretty much right at the 20% Unemployment Rate. The one saving grace is probably the PPP, which is allowing small businesses to retain payroll, so those are additional employees whom may … (0 comments)

interest rate trends: Daily Market Report 5/13/20 - 05/13/20 09:28 AM The Producer Price Index, which is inflationary data on the Wholesale Sector, dropped 1.3% in April, as it's YoY dropped from 0.7% in March to -1.2% in April. It's Core PPI (excluding food and energy) dropped 0.3%; and it's YoY went from 1.4% in March to 0.6% in April. Stocks are in Negative Territory this morning on sombering comments by Fed Chair Powell. He had mentioned that the current state is unprecedented and we could see over the duration of recovery that liquidity problems can turn into solvency problems. Also, he suggested that another stimulus package may help the economy … (1 comments)

interest rate trends: Daily Market Report 5/12/20 - 05/12/20 10:02 AM The NFIB Small Business Index dropped from 96.4 in March to 90.9, which many thought it would dive down into the 80s. This report represents the confidence in Small Businesses. The Consumer Price Index dropped 0.8% in April and it's YoY dropped from 1.5% to 0.3%; and when you exclude food and energy from the equation, which are uncontrollable variables, then we have the Core CPI. The Core CPI dropped 0.4% in April and it's YoY dropped from 2.1% to 1.4%. You can see the difference, especially for April, the impact that food and energy can have, as Oil dropped … (1 comments)

interest rate trends: Daily Market Report 5/11/20 - 05/11/20 08:39 AM There are no economic data to report today. Stocks are trading in Mixed Territory this morning. NASDAQ is the only index in positive territory. There are some reports out that there may be some increased levels of coronavirus around the different parts of the world, as many are trying to re-open their economies. MBS is also Down 9bps, so coupled with Fridays slide, then Mortgage Rates have worsened some since last Friday morning's position. Yields have worked their way back above it's 25 DMA and sitting at 0.69%.
If you're located in California and looking to either buy a home … (0 comments)

interest rate trends: Daily Market Report 5/8/20 - 05/08/20 09:50 AM The BLS released their Jobs data today, so we'll start with the Non-Farm Payrolls, which lost 20.5 million jobs in April while the Unemployment Rate soared to 14.7%. This is the 2nd Highest Unemployment Rate now on record. Also, it was just a matter of 2 months ago, that we were at a 50 year low at 3.5%. The Average Hourly Earnings rose 4.7% in April. We think this number is a bit skewed. We think the recent job losses were those in lower paid positions, which their data would help to offset the overall figures. Stocks are Up despite … (1 comments)

interest rate trends: Daily Market Report 5/7/20 - 05/07/20 09:25 AM Initial Jobless Claims are still reporting high volumes of claims, but it has been trending lower each week, as it report 3.85 million for last week's report to 3.17 million today. Productivity dropped 2.5% for Q1, however, it exceeded it's forecasts of -5.5%. Unit Labor Costs rose 4.8% in Q1. Stocks are Up this morning, as they view the lower trend of people applying for unemployment lessening each week and many state economies beginning to re-open. China reported positive data (first since December, before pandemic), as forecasts were still calling for a major drop. US and Chinese Officials will be … (2 comments)

interest rate trends: Daily Market Report 5/6/20 - 05/06/20 10:17 AM The ADP Employment Report had revised it's March numbers from -26k to -149k; while April shows a drop of 20.2 million. Definitely shows a bleak week for Jobs data this week, as this is the first of 3 Jobs data we'll see this week. Stocks were in Negative Territory early on the Jobs data, but has since moved into Positive Territory, as many states are beginning to re-open their economies in phases. The Treasury Dept. announced they would boost the longer termed bond auctions more than expected, which is stressing govt bonds. As a result, MBS is Down 11 bps … (0 comments)

interest rate trends: Daily Market Report 5/5/20 - 05/05/20 08:43 AM The only data being reported today is on the Services Industry. The Markit Service PMI dropped down to 26.7 in April; while ISM Non-Manufacturing Index dropped down to 41.8%. Anything below 50 on either index is considered in Contraction/Negative Territory. Stocks are Up this morning on optimism of global economies beginning to re-open, along with possible vaccines and higher oil prices. The US Treasury will be looking to borrow $3 Trillion today for the Q2 to meet Congress' Stimulus/Emergency Plans. This is by far the largest amount they've ever borrowed. MBS is still hovering above it's 25 DMA and Up … (1 comments)

interest rate trends: Daily Market Report 5/4/20 - 05/04/20 09:38 AM Factory Orders dropped by 10.3% in March. Stocks are mostly down, but Mixed presently, as NASDAQ is the only index to jump into positive territory. Investors are reviewing the Presidents and other Officials comments about US and China's relationship, which seems to have dissipated further after the coronavirus. They're concerned over a possible Cold War. Meanwhile, both MBS and Yields are testing thier 25 DMA. Let's hope they hold. MBS is currently Down 8bps; so depending on the Lender, Mortgage Rates have either remained Unchanged or Worsened a little bit. Yields are currently at 0.63%.
If you're located in California … (0 comments)

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