US Q3 gdp was up 3.5% vs 3.2% prior estimate

December 22nd, 2016

Commentary at the close: Bonds remain in a sideways trend on a stair within the Down Escalator. You can see this phenomenon on the chart below that looks like stairs going down.  We are hoping to see the stairs start to move up and rates to start coming down.  With stocks at all-time highs and bonds at multi year lows it would be logical to assume that they would go in different directions, since they both compete for the same investment dollar.  


WRAP: Better-than-expected GDP and tame Core PCE caused little reaction in the markets today. The Bond closed at 101.59, up 19bp. Stocks closed lower across the board with the Dow down 32.66 points to 19,941.96, the S&P 500 down 5.58 points to 2,265.18, and the NASDAQ down 12.51 points to close at 5,471.43. WTI oil gained +$0.71, to close at $52.49. The 10-yr T Note yield was 2.54% at the end of session.

Commentary 11:29 am- 3.5% FNMA 101.59 No change. Volumes are low ahead of the holiday weekend.  Many big investors have closed their books for 2016. It appears we have found a short term bottom if prices remain at these levels. Meanwhile it appears that investors are driving slowly toward Dow 20,000 then tapping on the brakes and backing up slightly.  We will continue to monitor this, even though this figure has no fundamental importance except for the 4 zeroes.

Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. Though GDP is usually calculated on an annual basis, it can be calculated on a quarterly basis as well.www.investopedia.com/terms/g/gdp.asp

Today's Agenda

Date & Time of ReportReportForEstimateActualPriorImpact
12/22/16 8:30Jobless Claims12/17256k275k254kModerate
 Personal Comsumption Expenditures (Core PCE)Nov0.10%0.0%0.10%HIGH
 Personal Comsumption Expenditures (Core PCE)YOYNA1.6%1.70%HIGH
 Personal SpendingNov0.40%0.2%0.30%Moderate
 Personal IncomeNov0.30%0.0%0.6%%Moderate
 GDP Chain DeflatorQ31.40%1.4%1.40%Moderate
 Gross Domestic Product (GDP)Q33.30%3.5%3.20%Moderate
 Durable GoodsNov-4.50%-4.6%4.80%Moderate

Tomorrow's Agenda:

Date & Time of ReportReportForEstimateActualPriorImpact
12/23/16 10:00 AMNew Home SalesNov573k 563kModerate
 Consumer SentimentNov98.2 98Moderate

 

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.

 

 

12:56 PM At midday, MBS near unchanged to lower. Stocks lower. 10-yr yield 2.55%.

12:14 PM MBS trade in a tight range for the past few hours with no conviction from either side of the market.

10:28 AM The 30-yr conventional fixed rate mortgage ($417K or less) rose to 4.30% this week with 0.5 in points and fees, reports Freddie Mac.

10:07 AM November Personal Income 0.0% vs 0.3% expected. Personal Spending 0.2% vs 0.4% expected.

10:06 AM Core PCE inflation remains tame in November, 0.0% vs 0.1% from October. Year-over-year Core PCE 1.6%, below the 1.8% in October.

9:31 AM Stocks open modestly lower.

9:28 AM The FHFA reports home prices were up 0.4% in October from September, +6.2% from October 2015.

8:46 AM MBS edging lower.

8:42 AM Within GDP, consumer spending rose 3.0% from the prior estimate of 2.8%.

8:38 AM Not much of a reaction to the economic data.

8:36 AM Personal Income & Spending, Core PCE will be released at 10:00 a.m.

8:34 AM November Durable Orders -4.6% vs -4.5% expected.

8:33 AM Weekly Initial Jobless Claims rise by 21K to 275K vs the 256K expected.

8:32 AM Final Q3 GDP 3.5%, up from the 2nd reading of 3.2% and just above the 3.3% expected.

For more info: http://www.cnbc.com/2016/12/22/final-reading-on-us-q3-gross-domestic-product-was-up-35-vs-32-prior-estimate.html

8:28 AM Affordability in the housing market declined to its lowest level since the fourth quarter of 2008, according to the latest Home Affordability Index from ATTOM Data Solutions, a fused property database, reports HousingWire.

8:18 AM Cash sales for homes in September increased for a third month in a row.

8:17 AM U.S. dollar index 102.98, near unchanged.

8:16 AM WTI oil $52.26, -$0.23.

8:15 AM 10-yr T Note yield 2.54%, unchanged.

8:14 AM S&P futures near unchanged.

8:14 AM The final read on Q3 GDP, Weekly Initial Jobless Claims, Durable Orders, Personal Income & Spending and Core PCE will be released at 8:30.

8:10 AM MBS open flat to slightly lower as holiday trading volumes dwindle and a wait and see attitude ahead of a rash of economic data.

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.

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