CHM Blog

The 10 year note unchanged at 8:30 am ET at 3.84%, MBS prices at 8:30 am -8 bps from yesterday’s close.

Final Q3 GDP expected unchanged from the preliminary report at 5.2% was revised to 4.9%; personal consumption spending in Q3 +3.1% down from 3.6% in Q2. Unusual that the final GDP differed from the preliminary release. Consumer spending revised lower from 3.6% to 3.1%, consumer spending accounts for 70% of the economy.

Weekly jobless claims expected 210K reported at 205K +2K from the prior week. Continuing claims essentially unchanged at 1.87 million, the 4-week average 212K down from 213.5K the week before.

December Philadelphia Fed business index, not much of a mover, expected at -3.0 from -5.9 declined to -10.5.

More comments from Fed officials, Patrick Harker, Philly Fed President said yesterday the Fed doesn’t plan to cut interest rates soon because the job on reducing inflation is “not done,” but he added there is no need to increase rates any longer. He favors keeping interest rates high for a while to make sure the rate of inflation continues to slow toward the Fed’s 2% target. Prices are still rising at 3.1% annual rate. The time will come to lower rates, he said.

Yesterday afternoon the stock indexes rolled over for no meaningful reason except the UK growth revised lower. The DJIA ended the session -476, the worst one day drop ever in terms of the change. This morning the key indexes prior to the 9:30 am open rallied back recapturing about half the declines yesterday. Essentially just a one-off situation but the fact is the stock market remains vulnerable in the near term.

At 9:30 am the DJIA opened +253, NASDAQ +174, S&P +38. 10 year unchanged at 3.84%. FNMA 6.0 30 year coupon at 9:30 am +3 bps from yesterday’s close and +7 bps from 9:30 am yesterday.

At 10 am Nov leading economic indicators expected -0.5%, reported -0.5%; the 20th month LEI has been negative.

Nothing left today. Tomorrow PCE inflation for November, the year/year core PCE 3.4% down from 3.5%. Inflation still running well above the Fed’s 2.0% target but most Fed officials led by Powell want to keep rates from increasing, thinking the increases have yet to work through the economy.

PRICES @ 10:00 AM

10 year note: 3.86% +1 bp

5 year note: 3.84% unch

2 year note: 4.34% +1 bp

30 year bond: 4.00% +1 bp

30 year FNMA 6.0: @9:30 am 101.54 +3 bp (+7 bp from 9:30 am yesterday)

30 year FNMA 6.5: @9:30 am 102.46 +9 bp (+3 bp from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 100.58 +8 bp (-7 bp from 9:30 am yesterday)

Dollar/Yuan: $7.1394 +$0.0043

Dollar/Yen: 142.22 -1.35 yen

Dollar/Euro: $1.0997 +$0.0054

Dollar Index: 101.86 -0.54

Gold: $2,056.20 +$8.50

Bitcoin: 43,702 +305

Crude Oil: $73.38 -$0.84

DJIA: 37,320 +237

NASDAQ: 14,908 +130

S&P 500: 4734 +36

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.