CHM Blog

The FOMC and J Powell did and said what was expected yesterday. The takeaway from some of the optimists is his press conference sounded dovish strengthening the view there will be no more increases. The meeting was anticlimactic since there was nothing that markets were not expecting. The Fed will continue to make decisions based in “incoming data”, the same as always. The attention shifted quickly to the news today and tomorrow.

Weekly jobless claims this morning declined 7K from the prior week, forecasts 235K as reported 221K, the 4-week average declined to 233.75K from 237.5K.

Q2 advance GDP expected at 1.5% jumped to +2.4%, the data will be revised two more times, but the increase was somewhat of a surprise with the growth substantially higher than what economists were thinking. The reaction sent stock indexes higher in futures market trading.

June durable goods orders exploded, expected +0.5% increased 4.7%, excluding transportation orders expected –0.1% increased 0.6%, core capital goods expected -0.1% increased 0.2%.

Stronger GDP, decline in weekly claims, and strong durable goods, three points that tilt the slant toward more worries about the future of the Fed.

Like our Fed, the ECB increased rates this morning, also as expected, the ninth straight increase since last July brought the deposit rate to 3.75%. The ECB didn’t provide much forward guidance and like the Fed will decide its Sept meeting on incoming data.

At 9:30 am ET the DJIA opened +51, NASDAQ +172, S&P +35. 10 year at 9:30 am 3.90% +4 bps. FNMA 6.0 30 year coupon -6 bps from yesterday’s close and +2 bp from 9:30 am yesterday.

At 10 am June pending home sales, expected +0.3% increased 0.3%, year/year sales -15.6%. Details this afternoon.

Yesterday the DJIA streak of daily gains was the longest in 16 years, today on the open the longest daily gain is the longest since 1987. If the DJIA ends higher today it will be the longest run in more than 125 years.

PRICES @ 10:00 AM

10 year note: 3.92% +6 bp

5 year note: 4.20% +8 bp

2 year note: 4.94% +8 bp

30 year bond: 3.98% +4 bp

30 year FNMA 6.0: @9:30 am 100.80 -6 bp (+2 bp from 9:30 am yesterday)

30 year FNMA 5.5: @9:30 am 99.44 -8 bp (unch from 9:30 am yesterday)

30 year GNMA 5.5: @9:30 am 99.56 -5 bp unch from 9:30 am yesterday)

Dollar/Yuan: $7.1689 +$0.0183

Dollar/Yen: 140.79 +0.55 yen

Dollar/Euro: $1.1012 -$0.0074

Dollar Index: 101.67 +0.78

Gold: $1946.30 -$23.80

Bitcoin: 29,526 -80

Crude Oil: $79.13 +$0.35

DJIA: 35,582 +62

NASDAQ: 14,328 +200

S&P 500: 4601 +34

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.