Philadelphia Fed

February 16th, 2017

Commentary at the close: MBS pushed higher in today's session as the Stock rally paused with the Dow, S&P and Nasdaq near record highs. Bonds were able to shrug off better than expected economic data and moved higher.

Fannie Mae 30-yr 3.5% coupon gained 31bp to end the session at 102.12 up 19 bp when rates were set today at 10 am.  They opened at 101.94 High 102.16 Low 101.81.

Stocks closed near unchanged. Dow 20,619.77, S&P 2,347.22, Nasdaq 5,814.90. WTI oil closed at $53.36/barrel, +$0.25. 10-yr T Note yield 2.45%. There are no major economic reports due for release tomorrow. 

DEFINITION of 'Philadelphia Federal Index'

A regional federal-reserve-bank index measuring changes in business growth. The index is constructed from a survey of participants who voluntarily answer questions regarding the direction of change in their overall business activities. The survey is a measure of regional manufacturing growth. When the index is above 0 it indicates factory-sector growth, and when below 0 indicates contraction.

Read more: Philadelphia Federal Index http://www.investopedia.com/terms/p/philadelphiafederalindex.asp#ixzz4YblqBIyv 
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Today's Agenda

Thursday, February 16, 2017ReportForEstimateActualPriorImpact
8:30 AMJobless Claims2/11245239K234KModerate
8:30 AMPhiladelphia Fed IndexFeb17.543.323.6High
8:30 AMHousing StartsJan1220K12461226KModerate
8:30 AMBuilding PermitsJan1230K1285K1210KModerate

 

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.

10:31 AM 3.5% Fannie Mae 30-yr coupon up 19 bp at a price of 102.03 up 9 bp when rates were set today at 10:00 am Open 101.94 High 102.03 Low 101.84 You will notice that the low today is S1 on the chart below.  This indicates that traders started buying at this level.  This is what you might call a bounce.

1:45 PM 10-yr T Note yield 2.44% from this morning's high of 2.49%.

12:54 PM Near midday, MBS holding solid gains. Dow, S&P slightly lower.

11:12 AM Next week, the Treasury will sell $26B 2-yr Notes on Tuesday, $34B 5-yr Notes on Wednesday and $28B 7-yr Notes on Thursday.

11:11 AM Starting Friday, Feb. 17, MMG members will receive a Weekly Market Wrap near market close each week. This concise email provides a recap of what happened that week and why, plus an annotated Japanese Candlestick Chart. You’ll also get a lock or float position for the weekend to advise your clients.

11:06 AM Freddie Mac reports that the 30-yr fixed conventional mortgage rate ($424K or less) at 4.15% this week from 4.17% last week essentially unchanged and continue to hover at historically attractive levels.

11:02 AM MBS able to move well into positive territory as the Stock rally pauses.

10:31 AM 3.5% Fannie Mae 30-yr coupon up 19 bp at a price of 102.03 up 9 bp when rates were set today at 10:00 am Open 101.94 High 102.03 Low 101.84 You will notice that the low today is S1 on the chart below.  This indicates that traders started buying at this level.  This is what you might call a bounce.

 

9:40 AM Limited support for MBS seen from the New York Fed today and tomorrow.

9:37 AM 10-yr T Note yield 2.48%. WTI oil $53.46/barrel, +$0.35. U.S. dollar index 100.67, -0.48.

9:33 AM S&P slightly higher soon after the opening bell on Wall Street.

8:53 AM January Building Permits +4.5% from December to 1.285 million units annually, below the 1.230 million expected.

8:44 AM After the economic data, MBS holding gains.

8:41 AM Weekly Initial Jobless Claims +5K to 239K, inline with estimates.

8:38 AM January Housing Starts -2.6% from December to 1.246 million units on an annual basis, though above the 1.220 million expected. However, December revised higher to 1.279 million from 1.226 million.

8:33 AM February Philly Fed soars to 43.3, well above the 17.5 expected and the best reading since 1984.

8:30 AM Stocks have been on a tear hitting record highs. The S&P closed higher for seven straight days on Wednesday after President Trump ignited the rally saying last Thursday that a "phenomenal" tax announcement will be coming in the next few weeks. In addition, strong economic data is also boosting Stocks, while bank shares also chipped in on prospects of an upcoming interest rate hike.

8:19 AM After two straight days of losses, MBS open modestly higher as S&P futures edge lower.

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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