Senate Approves Budget Blue Print. Are Tax Cuts Next?

Senate Approves Budget Blue Print. Are Tax Cuts Next?

October 20th, 2017

Suggestions that can change during the day: Mortgage Bond prices have slipped below key support levels. Locking is recommended.

After close Commentary: Hopes of tax reform sent Bond prices lower this morning and Stocks higher to end the week. The Fannie Mae 3.5% 30-yr coupon closed at 102.66, -25bp. The slightly better Existing Home Sales data had little impact on the Bond markets. The three major Stock indexes closed at record highs on hopes of tax reforms as the Republican-led Senate approved a $4T budget measure which enables the GOP to pass a tax bill with a simple 51-vote majority in the Senate. The Dow gained 23,328.63, the S&P 500 gained 13.11 points to 2,575.21, while the NASDAQ was up 23.98 points to end at 6,629.05. WTI oil closed at $51.66/barrel, +$0.18. 10-yr yield 2.38%. Have a great weekend!

 

Late morning Commentary:   The National Association of REALTORS® reported on Friday that low inventories coupled with rising prices capped sales of existing or previously owned homes in September. Existing Home Sales rose modestly by 0.7% from August to September to an annual rate of 5.39 million units, above the 5.29 million expected. The rise comes after three straight months of declines. From September 2016 to September 2017, sales were down 1.5%. Month-over-month, sales were up in the Midwest, lower in the South and West and were unchanged in the Northeast.

Lawrence Yun, NAR chief economist, says, “Realtors® this fall continue to say the primary impediments stifling sales growth are the same as they have been all year: not enough listings – especially at the lower end of the market – and fast-rising prices that are straining the budgets of prospective buyers.” The median existing-home price for all housing types in September was $245,100, up 4.2% from September 2016 ($235,200). Inventories were running at a 4.2 months' pace, below the 6 month pace that is seen as healthy.

Fri, Oct 20 8:28 AM The Fannie Mae 30-yr 3.5% coupon rests on support at the 200-day Moving Average (102.73).
Fri, Oct 20 8:21 AM September Existing Home Sales will be released at 10:00 a.m. ET.
Fri, Oct 20 8:13 AM WTI oil at $50.89/barrel, -$0.40.
Fri, Oct 20 8:12 AM U.S. dollar index 93.24, +0.13.
Fri, Oct 20 8:10 AM Bond prices lower yields higher. 10-yr yield rises to 2.35% from yesterday's close of 2.32%.
Fri, Oct 20 8:09 AM The Senate approved a budget blueprint which could clear the way for tax cuts. S&P futures higher.

Johnmarbury.com has attempted to verify the information contained on this post.  However any aspect of such may change without notice.  Johnmarbury.com does not provide investment advice and does not represent that any of the information or related analysis is accurate or complete at any time. Forgive my spelling and grammatical mistakes due to writing skills that are lacking and the need to communicate quickly.  

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