CHM Blog

Yesterday, Juneteenth. Markets were closed. The NAHB released it housing market index, expected at 50 but increased to 55, a solid increase. The index over 50 indicates expansion.

This morning at 8:30 am ET May housing starts and permits, starts expected at 1.400 mil jumpe3d to 1.631 mi and April revised from 1.401 mil to 1.340 mil; permits expected at 1.433 mil increased to 1.491 mil. Starts +21.7%, permits +5.2%.

The calendar doesn’t have a lot this week although housing data yesterday and this morning much better than forecasted. The week headlined with Jerome Powell at Congress with several other Fed officials also speaking. Last week the Fed paused its increases; debates continue whether the Fed is finished or just taking a breath. Data will tell although we expect the Fed is finished. Can’t tell it by the way the equity markets are rallying; economic outlooks don’t look that shiny, rates are beginning to pressure consumers’ credit cards, the cost of basic staples increasing, the service sector that had been holding firm is beginning to show weakness, manufacturing weak, M2 money supply is flat, China’s economy rapidly slowing. The stock market is being stretched and we expect the indexes are headed for a decline, the higher they go, the bigger the declines. If equities do roll over and the economic outlook changes in the minds of investors and traders, the Fed will end its increases.

Between now and the July FOMC meeting expect increased debates within US financial markets. Powell’s testimony this week is important although the Fed is being led by markets more than inflation concerns as inflation is cooling in many areas but not basic needs like food and wages. The critical level for the key 10 year note is 3.84%, every time it increases to that level it backs away although staying in a tight range. Last week the 10-2 bps, FNMA 6.0 30 year coupon last week -25 bps. The DJIA last week +353, NASDAQ +431, S&P +111.

At 9:30 am the DJIA opened -195, NASDAQ -35, S&P -18. 10 year note 3.73% -3 bp. FNMA 6.0 30 year coupon +2 bp.

PRICES @ 10:00 AM

10 year note: 3.72% -5 bp

5 year note: 3.95% -4 bp

2 year note: 4.70% -2 bp

30 year bond: 3.81% -5 bp

Libor Rates: 1 month 5.163%; 3 mom 5.514%; 6 month 5.656%; 1 year 5.895% (6/19/23)

30 year FNMA 6.0: @9:30 101.38 -2 bp

30 year FNMA 5.5: @9:30 100.13 +5 bp

30 year GNMA 5.5: @9:30 100.09 +2 bp

Dollar/Yuan: $7.1769 +$0.0154

Dollar/Yen: 141.52 -0.46 yen

Dollar/Euro: $1.0917 -$0.0008

Dollar Index: 102.52 unch

Gold: $1947.80 -$24.40

Bitcoin: 26,879 +168

Crude Oil: $70.43 -$1.35

DJIA: 34,110 -188

NASDAQ: 13,655 -35

S&P 500: 4390 -20

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.