CHM Blog

Over the weekend reports of a deal on the debt ceiling. Congress is back and will tackle the differences between the two parties. President Biden and House Speaker Kevin McCarthy appear on track to gain enough bipartisan support to suspend the debt limit, but the measure could still run into procedural obstacles, according to the WSJ. Today the bill must go through the House Rules Committee before it can get to the floor; two Republicans on the committee not happy, Chip Roy of Texas and Ralph Norman of South Carolina, but Republicans have the votes (nine members compared to four Democrats). The goal is to suspend the debt ceiling for two years, cutting spending on some domestic spending favored by Dems while increasing military spending by 3.0% favored by the GOP. As usual no one is satisfied; too little domestic spending and too much spending. The House won’t take up the bill for a vote until tomorrow, part of an agreement McCarthy made to give lawmakers 72 hours to read the text before voting on a bill; there is no room for holdouts given the slim margins in the House; Republicans can lose no more than four votes to pass the legislation.

At 9:30 am ET the DJIA opened +7, NASDAQ +139, S&P +22. 10 year note at 9:30 am 3.75% -5 bps, at 7 am this morning the 10 traded down to 3.70%. At 9:30 am FNMA 6.0 30 year coupon +12 bps and +15 bps better than at 9:30 am Friday morning.

The April Case/Shiller home price index better than thought, +0.5% on estimates of -0.1%; year/year -1.1% with expectations of -1.6%.

At 10 am May consumer confidence index from the Conference Board, expected at 100.0 increased to 102.3, April revised from 101.3 to 103.7. We will have the details this afternoon.

All about watching the voting now as the legislation works through Congress, the voting will be close and along party lines. Very early this morning the 2 year note yield traded at 4.60% +5 bps then backed down to 4.55% unchanged from Friday. Not the kind of move we want to see and implies there is still a risk with uncertainty over the debt issue.

PRICES @ 10:00 AM

10 year note: 3.74% -6 bp

5 year note: 3.86% -7 bp

2 year note: 4.52% -4 bp

30 year bond: 3.92% -4 bp

Libor Rates: 1 month 5.154%; 3 month 5.476%; 6 month 5.581%; 1 year 5.660% (5/26/23)

30 year FNMA 6.0: @9:30 am 100.59 +12 bp (+15 bp from 9:30 am Friday)

30 year FNMA 5.5: @9:30 am 99.24 +8 bp (+22 bp from 9:30 am Friday)

30 year GNMA 5.5: @9:30 am 99.27 +19 bp (+25 bp from 9:30 am Friday)

Dollar/Yuan: $7.0815 +$0.0084

Dollar/Yen: 139.85 -0.60 yen

Dollar/Euro: $1.0736 +$0.0028

Dollar Index: 104.03 -0.17

Gold: $1969.90 +$6.80

Bitcoin: 27,826 +146

Crude Oil: $69.93 -$2.74

DJIA: 32,993 -100

NASDAQ: 13,051 +76

S&P 500: 4213 +8

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.