November 9th, 2016
Commentary MBS plunged on heavy volume today in the first full trading day following the surprise win by Donald Trump. Treasury yields soared and Stocks did a huge reversal higher after Dow futures were limit down (5%, -800 points) briefly overnight. As we have seen many times in the past, when prices fall through support like the 200-day Moving Average, the selling is not one and done. Despite the quick price erosion, things may actually get worse before they get better. Who knows stay tuned in tomorrow to see what happens.
Market Wrap Carnage gripped the Bond markets today as whipsaw Stock action saw the Dow lose over an 800 points in futures overnight only to close +250 points in today's session as the equity markets rallied around a Trump White House win. In addition, weak demand from today's 10-yr Note auction also pushed Bond prices lower while yields surged (went highter). The 3% Fannie Mae 30-year coupon fell 97bp to end the tumultuous session at 101.81. The Dow gained 256.88, +256.88 points, the S&P 500 jumped 23.69 points to 2,163.25, while the Nasdaq was up 57.58 points to end at 5,251.07. WTI oil closed at $45.27/barrel, +$0.29. 10yr T Note yield 2.07%. Weekly Initial Jobless Claims will be released tomorrow morning. The Treasury will sell $15B 30-yr Bonds.
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. Chart below is the indexes after the close.
9:54 AM Stocks again turn positive.
9:34 AM Short covering could be the key factor behind positive Stocks as they now fall into negative territory.
9:32 AM After Dow futures plunged over 800 points overnight, the Dow opens +60 points.
8:55 AM Investors selling Bonds and Stocks this morning.
8:55 AM Dow futures were down over 800 points overnight ... but have since recovered, now down 236 points.
8:50 AM Fed Fund Futures show a 56% chance of a rate hike in December, down from 80% yesterday.
8:24 AM The U.S. dollar index 97.95, +0.09.
8:23 AM MBS open sharply lower.
8:23 AM WTI oil near unchanged at $44.94/barrel.
8:22 AM Treasury prices plunging. The yield on the 10-yr T Note went from yesterday's close of 1.86% to 1.71% overnight, but now at 1.95%.
8:20 AM S&P futures plunging, but well off their worst levels seen overnight on the surprise election results.
8:01 AM Donald Trump (R) becomes the 45th president of the United States.
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