We hope 100 does not go up in Smoke

November 15th, 2016

 

Tomorrow's Agenda
11/16/2016 8:30:00Producer Price IndexOct0.30% 0.30%Moderate
 Core Producer IndexOct0.20% 0.20%Moderate

 

End of the day Commentary: Yesterday we were worried about the price of $100 holding up.  At the end of today we were 56 basis points above that level.  The markets appear to have stablized, since the election.  We will stay on top of this.  Every day is a new day.

 

Market Wrap:

 

MBS were able to move higher in today's session as buyers came back to the markets after selling dominated in previous days. The better-than-expected economic data was brushed off by players. The 3% Fannie Mae 30-yr coupon rose by 41bp to end the session at 100.56, the session high. We will be switching to the 3.5% in a few days. Stocks closed higher as the Trump related victory euphoria continued. The Dow closed at a fresh record high of 18,923.06, +54.37 points, the S&P was up 16.19 points to 2,180.39, while the Nasdaq gained 57.22 points to end at 5,275.62. WTI oil closed at $45.81/barrel. +$2.49. 10-yr yield 2.22%. Tomorrow's economic data features wholesale inflation from the Producer Price Index and the NAHB Housing Market Index.

 

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.  

 
 

4:03 PM The Dow closed higher for the 7th straight session at a new record high of 18,923.

2:58 PM Five Utah students stabbed at high school, teen in custody.

2:57 PM Stocks turn positive.

2:01 PM WTI oil gushes higher by $2.20 to $45.53/barrel on renewed hopes of an OPEC oil production cut at the November 30 meeting.

12:57 PM At midday, MBS holding solid gains, Stocks mixed. 10-yr yield 2.22%.

11:59 AM Dow -44 points, S&P +7 points, Nasdaq + 41 points.

11:58 AM MBS trade near the session highs as the markets seeks to stabilize after the steep plunge.

11:51 AM The New York Fed is in the market purchasing up to $2.5B in Fannie/Freddie 30-yr 3s and 3.5s as of this post.

9:53 AM MBS trade back up to session highs.

9:32 AM Stocks open mixed ... Dow modestly lower, Nasdaq and S&P slightly higher.

9:20 AM The MBAs Builder Application Survey declined in October from September.

8:51 AM MBS lose some gains.

8:44 AM Despite the better-than-expected economic data, MBS show resilience holding gains.

8:32 AM November Empire Manufacturing 1.5% vs -0.5% expected.

8:31 AM October Retail Sales 0.8% vs the 0.6% expected. September revised higher to 1.04% from 0.6%.

8:15 AM The Fed's Rosengren said yesterday that he sees a high likelihood of a December rate hike.

8:12 AM The New York Fed will purchase up to $2.5B in Fannie/Freddie 30-yr 3s and 3.5s later this morning.

8:10 AM MBS open higher.

8:01 AM Investors will be looking for clues on policies from President-elect Donald Trump. It is expected that the new administration will cut taxes and increase spending, which could accelerate inflation. These factors have buoyed the dollar, sparked a rally in Stocks while driving Bond yields higher.

7:59 AM After six straight days of gains for the Dow, Stock futures pointing higher ahead of Retail Sales and Empire Manufacturing at 8:30.

7:56 AM WTI oil $44.52/barrel, +$1.22. U.S. dollar index declines by 0.24 to 99.87.

7:53 AM The 10-yr T Note yield edges lower to 2.20% from yesterday's close of 2.25%.

7:51 AM MBS look to open near unchanged. Looking for signs of stabilization.

7:42 AM Dallas Fed President Rob Kaplan said yesterday that the recent jump in yields does not yet mean anything for the direction of Fed policy and that a rate hike is likely in the near-term.

For information about 100 see yesterday's post.

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.

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John Marbury
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