Stock losses are Bonds gains

October 13th, 2016

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.

MBS edged higher in today's session aided in part by declining Stock prices and key support levels. The 3% Fannie Mae 30-yr coupon rose 19bp to end at 103.28. It looks like the current top is $104 and the bottom is hopefully $103. Today's strong demand from the 30-yr Bond auction also helped to support higher Bond prices. Stocks plunged in the early part of the session on rate hike fears and on weak economic data from China. However, Stock cut a big chunk of losses by the close. The Dow lost 45.26 points to 18,098.94, the S&P 500 fell 6.63 points to 2,132.55, while the Nasdaq was down 25.68 points to end at 5,213.33. WTI oil closed at $50.44, +$0.26. 10-yr T Note yield 1.74%. Tomorrow's economic data includes Retail Sales, PPI and Consumer Sentiment. Wells Fargo, JPMorgan and Citigroup will report quarterly earnings before the Stock market opens tomorrow morning at 9:30 a.m. ET.

3:55 PM

Stocks continue to cut losses ... Dow now -56 points after being down 185

Fed Pres Harker is a Hawk.

 

2:00 PM - Philadelphia Fed President Harker says the central bank should raise the short-term Fed Funds Rate in December and that the Fed should hike twice in 2017. Mr. Harker will be a voting member in 2017.

1:06 PM - The $12B 30-yr Bond auction draws a "B+" rating.

1:04 PM - At midday, MBS holding decent gains. Stocks cutting losses. 10-yr yield 1.73%. WTI oil $50.38/barrel, +$0.19.

12:53 PM - After being down 185 points earlier in the session, the Dow is now down 77 points.

12:43 PM - The U.S. launched missile attacks today against radar sites in Yemen following two incidents this week in which missiles were fired at a U.S. Navy ship from a rebel controlled area of the country.

12:41 PM - Treasury bonds pay a fixed rate of interest every six months until they mature. They are issued in a term of 30 years.

12:40 PM - Treasury notes, sometimes called T-Notes, earn a fixed rate of interest every six months until maturity. Notes are issued in terms of 2, 3, 5, 7, and 10 years.

12:39 PM - Treasury bills, or T-bills, are sold in terms ranging from a few days to 52 weeks. Bills are typically sold at a discount from the par amount (also called face value). For instance, you might pay $990 for a $1,000 bill. When the bill matures, you would be paid $1,000.

 

12:38 PM - The Bond markets await the 1:00 p.m. ET release of today's $12B 30-yr Bond auction

11:16 AM - Amazon reports it will hire 120,000 holiday seasonal workers this season.

10:45 AM - Wells Fargo, Citigroup, JPMorgan Chase and PNC will report earnings before the bell tomorrow.

10:39 AM - Freddie Mac reports that the 30-yr fixed conventional mortgage rate ($417K or less) rose to 3.47% this week with 0.6 in points and fees.

10:37 AM - Stocks cutting some losses

10:31 AM - OPEC reports record oil output

10:30 AM - MBS trade in a tight range this morning as they hold onto to modest gains.

9:54 AM Stocks open lower on rate hike fears, lower bank shares, weak economic data out of China and slowing global growth. Dow -163 points.

8:31 AM

Weekly Initial Jobless Claims 246K vs the 255K expected.

8:15 AM

The national average price for a regular gallon of gasoline is at $2.25, up from $2.17 a month ago. .

Weekly Initial Jobless Claims will be released at 8:30.

The Treasury will sell $12B 30-yr Bonds today, results at 1:00 p.m. ET and comes after yesterday's strong demand for the 3- and 10-yr paper.

MBS open flat to slightly higher.

Outplacement firm Challenger, Gray & Christmas reports job openings fell more than expected in August to 5.44 million from 5.83 million in July.

8:15 AM - MBS look to open slightly higher.

10-yr T Note yield 1.75%.

WTI oil near unchanged at $50.328/barrel.

Wells Fargo Chairman and CEO John Stumpf is retiring immediately from both positions at the embattled bank.

8:05 AM - Sources say that Deutsche bank is introducing a hiring freeze as the bank seeks to cut costs amid a deep strategic overhaul, which is weighing on bank stocks. "

Contact

John Marbury
jmarbury@nationalbankofcommerce.com
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Phone:205-266-5669
Fax: 866-217-4174

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Birmingham, Alabama 35209
 

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