December 20th, 2016
Commentary: Traders sometimes focus on round numbers with lots of zeros after them, crossing a level like Dow 20,000 has no fundamental importance, but they sometimes become self-fulfilling prophecies. Stock sellers may come out after reaching 20,000 on the Dow this level and move into safer investments like bond that are currently at bargain prices. The Fannie Mae 30-yr 3.5% coupon closed down 6 basis points at $101.41 above S1 ($101.34) on the chart below for the 2nd straight session. Another fundamental number with no importance, but a number that traders view as positive sign for lower rates in the future.
WRAP: Stocks continued in its post-election Trump rally. The Dow closed at a record 19,974,62, up 91.56 points and is up 9% since November 8. The Nasdaq also closed at a record 5,483.94, +26.50 points, while the S&P closed higher by 8.23 points to 2,270.76, just shy of its closing record. WTI oil settled at $52.23, +$0.11. 10-yr T Note yield 2.56%. Existing Home Sales will be released tomorrow.
|Date & Time of Report||Report||For||Estimate||Actual||Prior||Impact|
|12/21/16 10:00:00 AM||Existing Home Sales||oct||5.50M||5.57M||Moderate|
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.
3:07 PM MBS trade in a tight range for most of the afternoon session.
1:10 PM General Motors sends layoff notice to 1,300 Michigan workers.
11:55 AM The Fannie Mae 30-yr 3.5% coupon bounces off the session low and trades above 101.34.
11:51 AM MBS now at session highs with minor losses.
11:38 AM Stocks cut into some gains.
11:26 AM The Dow hovers just below the 20,000 mark, now at 19,969.
10:49 AM The 3.5% Fannie Mae 30-yr coupon drifts lower from the 101.34 level. Be on guard, we could be calling you shortly.
9:41 AM The New York Fed is currently purchasing a boatload of Fannie/Freddie 30-yr 3.5s and 4s.
9:39 AM The closes in on 20,000 as it trades at 19,973, an all-time high.
9:32 AM Stocks open higher as the rally charges on
8:58 AM CoreLogic's senior vice president and chief economist, Frank Nothaft, says mortgage rates will average just over 4% next year, about 0.5% higher than in 2016.
8:17 AM WTI oil $52.45/barrel, +$0.33.
8:17 AM U.S. dollar index 103.54, +0.45 as interest rate hikes dance in the heads of investors.
8:16 AM There are no economic reports due for release today.
8:15 AM 10-yr yield 2.56% from the 2.54% close yesterday.
8:05 AM MBS look to open lower as futures rally.
8:02 AM S&P futures higher as investors shrug off yesterday's geo-political events where the Russian ambassador to Turkey was shot and killed in Ankara. In addition, a truck plowed into a crowded Christmas market in Berlin, killing at least 12 people, and is suspected to be a terrorist attack.
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. On October 5th we started posting our rates and leaving them on the site for you to refer back to. This will allow you see where actual rates have been along with the news that caused the fluctuations on the rate sheet. I ask that you forgive my spelling and grammatical mistakes. This is due writing skills that are lacking and the need to communicate quickly. Most of the information posted on this blog along with the charts and indexes are available all during the day to the subscrbers of www.themortgagemarketguide.com The cost of subscription is very reasonable.