9/28/16 OPEC Cutting Production, Is that a good thing?

September 28th, 2016

What Is Going On With Interest Rates?  #wigowir

When the price of Mortgage Backed Securities (MBS) on the Chart above goes down rates go up, and when the price goes up rates come down. All times are Eastern Standard. 

Chart was posted at the close

3% MBS price $103.97 down 12 basis points from Tuesday’s close.  The market has a hard time staying over $104.

Commentary after close

The big news today was news that OPEC may be cutting oil production in November, which fueled a rally in Stocks as oil prices gushed higher. WTI oil closed at $47.05/barrel, +$2.38. The Dow gained 110.94 points to 18,339.24, the S&P 500 rose 11.44 points to 2,171.37, while the Nasdaq was up 12.83 points to end the session at 5,318.54. The 10-yr T Note yield 1.56%. Tomorrow's economic data includes the third and final reading for Q2 GDP along with Pending Home Sales and Weekly Initial Jobless Claims.

 

 

Below is the news when it happened and the market’s reaction.  All Times are Eastern Standard Time. 

4:36 PM - Fed's Mester says it's appropriate to raise rates.

3:24 PM - One dead, three injured in South Carolina elementary school shooting, suspect in custody.

2:34 PM - MBS at session lows. Alert To Lock!

2:33 PM - Oil reverses higher, Stocks well into positive territory.

2:12 PM - OPEC reaches a deal to limit oil production in November. Reuters

1:48 PM - Oil prices reverse and turn positive as traders awaited news from OPEC on capping production while there was an unexpected weekly decline in U.S. crude inventories. WTI oil +$1.21 to $45.88/barrel, up from the session low of $44.35.

1:30 PM - Fed's Evans says the low interest rate environment should last for some time.

1:13 PM - The $28B 7-yr Note auction garners a "C" rating.

12:36 PM - The Bond market awaits the last of this week's T Note auctions with the results of today's $28B 7-yr auction, results at 1:00.

11:07 AM - Stocks push lower into negative territory.

11:03 AM - Yellen says the Fed doesn't have a fixed timetable for removing the current accomodative stance for interest rates.

11:02 AM - Fed Chair Yellen says there are no politics involved in the decision making for monetary policy.

10:37 AM - The MBA report that the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 3.66% from 3.70%, with points decreasing to 0.33 from 0.38.

10:25 AM - Cash sales for homes fell to less than 30% in June for the first time since the housing crisis began, -2.5% from last June and -0.9% from May.

10:03 AM - Fed Chair Yellen doesn't comment on monetary policy in her semi-annual testimony in front of Congress. Ms. Yellen said that banks are well capitalized despite weak interest income.

9:38 AM - Stocks open modestly higher, Dow +40 points.

 

9:49 AM - Indexes below posted

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  • 30-Year Fixed-Rate Mortgage: The monthly payment on a $200,000 30-year Fixed-Rate Loan at 3.375% and 70% loan-to-value (LTV) is $884.19 with 0 points due at closing. The Annual Percentage Rate (APR) is 3.457%. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply.

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Below is the news when it happened and the market’s reaction.  All Times are Eastern Standard Time.

8:40 AM -Wells Fargo CEO and Chairman John Stumpf will forfeit $41 million in unvested equity and temporarily forgo his salary as the company launches an investigation in the retail banking unit.

8:37 AM - The MBAs refinance index fell 2%, but up 34% from a year ago. Purchase applications +1%, 10% higher from the same week a year ago.

8:31 AM - August Durable Orders unchanged vs the -1.9% expected.

8:26 AM - The Treasury will sell $28B 7-yr Notes today, results at 1:00 p.m.

8:13 AM - Five Fed members are scheduled to speak today. In addition, Fed Chair Yellen will be on Capitol Hill at 10:00 a.m. ET in front of the House Financial Services Committee at its semi-annual hearing on the Fed's supervision and regulation of the financial system

8:12 AM - Durable Orders will be released at 8:30.

8:11 AM - The MBAs Market Composite Index, a measure of total mortgage application volume, fell 0.7% in the latest week.

8:10 AM - U.S. dollar index 95.39, +0.07.

8:09 AM - 10-yr T Note yield 1.57% from yesterday's 1.55%.

8:08 AM - Oil prices are rising on hopes of production caps by OPEC in November along with a possible decrease in stockpiles. WTI +$0.50 to $45.18/barrel.

8:03 AM - MBS open near unchanged, S&P futures flat.

Contact

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