Daily Market Watch
MICHAEL TORRES
Sr. Mortgage Loan Officer | MLO 539674 | Residential and Commercial Real Estate Financing | Class A CDL Driver
By Michael Torres and Premier Mortgage Resources
Pricing is worse than Tuesday’s closing prices.
è MBS and Treasuries are taking a hit following Jane Yellen’s hawkish comments while stocks gain as the promise of tax reform is once again in the spotlight.
è After spiking up to our near term ceiling of 2.28 last week, the 10 YR has been attempting to inch back down hitting as low as 2.214 yesterday. We shot back up back up this morning so far at 2.291 right now…
è Stock Market Indexes are positive this morning after a better than expected report on business spending and ahead of highly anticipated details on tax reform.
è Yellen boosted expectations for a rate hike in December after cautioning against tightening “too gradually”. She also indicated there will be some upward pressure on rates as the Fed’s balance sheet shrinks.
è The GOP framework on tax reform is expected today and Trump is expected to discuss his administration’s tax plan later today.
è Senator Mitch McConnell scrapped a vote on the latest attempt to repeal and replace Obamacare after third Republican Senator has come out against it virtually sealing its fate for defeat.
è Meanwhile Puerto Rico remains a disaster area following Hurricane Mariah and the Trump administration feels the heat over its response compared to Harvey and Irma.
è In news released today: Durable Goods orders showed a 1.7 percent increase in August. Non-defense capital goods orders excluding aircraft rose 0.9 percent vs an expected 0.3 percent increase.
è In more news: Pending Home Sales fell 2.6 percent in August from July. This is the fifth drop in the past six months below expectations. A drop in supply and a spike in prices are largely to blame.
è Chief economist for Realtors warns the housing market has essentially stalled as demand continues to overwhelm supply. The hurricanes have only exacerbated the supply and affordability challenges.
è For applications last week a second consecutive downturn in refinancing volume offset one of the best weeks for purchase mortgage applications since mid-summer. Overall applications declined 0.5 percent.
è On tap tomorrow: GDP Final Q2, Jobless Claims and a 7 YR Treasury auction. Friday brings the PCE and another look at inflation numbers. 5 YR Treasury auction later today at 10am PST.
Top 2 boxes: 5 days of MBS prices on left. 1 year of the benchmark 10 Year Treasury Yield on Right.
Bottom 2 boxes: 3 months of MBS prices on left. 1 year on right. (majority of current locks are put into this MBS)
Red line is 25 day moving average. Green line is 50 day moving average. Purple line is 100 day moving average
Remember: the higher the price the lower the rate so higher is better for rates! (Pricing is in 32nds so -08 = .250 in price)