Commentary at the close: MBS fell today as risk on was the trade of the day. A mixed report from Existing Home Sales supported Bond prices, but sellers emerged when Stocks began to rally and after tepid demand from the first of this week's total of $88B in Treasury Notes. The Fannie Mae 30-year 3.5% coupon lost 31bp to end at 102.06. We were able to close above $102, so that is the one bit of good news for MBS. Stocks ended higher led by bank and tech shares. The Dow gained 112.86 points to end at 19,912.71, just below the elusive 20,000 mark. The S&P gained 14.87 points to 2,280.07, while the Nasdaq was up 48.01 points to 5.604.49, both record high closes. WTI oil closed at $53.18/barrel, +$0.43. The 10-yr T Note yield closed at 2.46%. There are no major economic reports due for release tomorrow.
Commentary 9:17 AM MBS are currently trading just below post election highs, and this may be a resistence that may be hard to break through. Stay tuned in to see what happens next.
3.5% Fannie Mae 30-yr coupon down 18bp at a price of 102.19 down 6 bp when rates were set yesterday.
What Is Going On With Interest Rates? #wigowir
Below is the news when it happened and the market’s reaction. For a full view of the day start at the bottom and work your way up. If want to know what just happened start at the top. All Times are Eastern Standard Time. When the price of Mortgage Backed Securities (MBS) goes down rates go up, and when the price goes up rates come down. Remember in the bond market Bad News is Good News and Good News is Bad news.
2:17 PM Within the December Existing Home Sales report it showed total housing inventory at the end of December dropped 10.8% to 1.65 million existing homes available for sale, which is the lowest level since National Association of REALTORS® began tracking the supply of all housing types in 1999.
2:22 PM 3.5% Fannie Mae 30-yr coupon down 37bp at a price of 102.00 down 25 bp when rates were set today at 9:00 am Open 102.16 High 102.28 Low 101.97
1:41 PM The Dow 20K watch is back on ... Dow up 140 points to 19,935.
1:15 PM Bond prices edge lower after the tepid 2-yr Note auction.
1:12 PM The $26B 2-yr Note auction garners a "C" rating.
1:10 PM At midday, MBS hit fresh session lows as Stocks surge higher.
12:15 PM Stock gains accelerate, Dow +90 points.
12:00 PM MBS hover near session lows. Stocks posting modest gains.
10:27 AM Alert To Lock!
10:04 AM December Existing Home Sales -2.8% from November to an annual rate of 5.49 million units, below the 5.55 million expected. November revised higher to 5.65 million from 5.61 million.
9:44 AM The two-day Fed meeting kicks off on January 31 and ends on February 1. The monetary policy statement will be delivered at 2:00 p.m. ET on Wednesday, February 1.
9:36 AM Dow turns positive.
9:32 AM Dow opens modestly lower, S&P slightly higher.
8:56 AM Foreclosure rates dropped more than any year on record in 2016, according to Black Knight Financial Services.
8:18 AM The Treasury will sell $26B 2-yr Notes today, results at 1:00 p.m. ET.
8:17 AM December Existing Home Sales will be released at 10:00 a.m. ET.
8:16 AM U.S. dollar index 100.25, +0.12.
8:16 AM WTI oil $53.16/barrel, +$0.40.
8:15 AM S&P futures flat after a mixed bag of earnings reports.
8:15 AM 10-yr T Note yield rises to 2.43% from yesterday's close of 2.40%.
8:11 AM After yesterday's rally, MBS open lower giving back some of the gains.
8:02 AM Earnings: Dupont misses, J&J light on revenues, Verizon mixed, Travelers beats, 3M beats earnings per share. All are Dow components.
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