Consumer Confidence takes money out of bonds & into Stocks

March 28th, 2017

Commentary at the close: The rug was pulled out from under Mortgage Bonds in today's trading session as the risk on trade emerged right after the strong Consumer Confidence numbers were released. Consumer Confidence hit 125, the highest level since December 2000. The Bond closed at 101.94, -34bp, the low for the day. This is below a level of support of 102.The Dow snapped its 8-day losing streak today closing up 150.52 points to end at 20,701.50. The S&P 500 was up 18.98 points to 2,358.57, while the NASDAQ was up 34.76 points to end at 5,875.14. WTI oil was last seen at $48.35/barrel, +$0.62. 10-yr T Note yield 2.41%. Tomorrow's economic data is limited to Pending Home Sales.

 

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.

4:02 PM Dow snaps 8-day losing streak. Closes up 150 points.
4:01 PM Stocks closing higher on strong Consumer Confidence data, oil rally.

2:53 AM  3.5% Fannie Mae 30-yr coupon down  28  bp at a price of 102.00 down 31 bp when rates were set today at 10:00 am Open 102.28 High 102.38 Low 101.97 We are back to 102.

 

2:02 PM Dow on track to snap a 8-day losing streak as bank stocks gain.
2:01 PM MBS continue to spiral lower. Dow +155 points.
1:43 PM Kansas City Fed President George (non-voter) says doesn't want Fed to raise rates quickly and shock the economy.
1:39 PM Stanley Fischer is the Vice Chairman of the U.S. Federal Reserve.
1:38 PM Fed's Fischer says wait and see attitude makes sense.
1:36 PM Fed's Fischer says two more rates hikes this seems about right.
1:16 PM The $34B 5-yr Note auction garners a "B" rating.
12:17 PM MBS at fresh session lows.
12:11 PM Dow +100 points after the big surge in Consumer Confidence.

 

11:47 AM  3.5% Fannie Mae 30-yr coupon down  9  bp at a price of 102.19 down 12 bp when rates were set today at 10:00 am Open 102.28 High 102.38 Low 102.19

11:38 AM Alert to Lock!
11:09 AM The big surge in Consumer Confidence revs up Stock prices.
11:05 AM Stocks now push into positive territory, Dow +70 points.

 

10:53 AM  3.5% Fannie Mae 30-yr coupon up  6  bp at a price of 102.34 up 3 bp when rates were set today at 10:00 am Open 102.28 High 102.38 Low 102.25 This coupon is up 165 bp since the March 13 low when it hit 100.69.

10:01 AM January Consumer Confidence surges to 125.6, well above the 113.3 expected.
9:57 AM The S&P slips into negative territory.
9:40 AM Soon after the open, the S&P is up marginally.
9:11 AM The S&P/Case Shiller 20-city Home Price Index rose 5.7%, 5.6% expected, from January 2016 to January 2017, up from 5.5% in December.
8:35 AM Fed speakers today include Kansas City Fed President George (non-voter), Dallas Fed President Kaplan (voter) and Fed Chair Yellen (voter).
8:32 AM Note: the Fannie Mae 30-yr 4.5% coupon has been added to the Bond page and the Fannie 30-yr 2.5% has been deleted.
8:26 AM The New York Fed will purchase up to $1.275B in Fannie/Freddie 30-yr 3.5% and 4% coupons beginning at 9:00 a.m. ET.
8:23 AM Last night, the Fed's Kaplan said that he would support trimming the Fed's holdings in both MBS and U.S. Treasuries when it comes time to shrink the Fed's balance sheet, reports Reuters.
8:13 AM The Treasury will sell $34B 5-yr Notes, results at 1:00 p.m. ET, and comes after yesterday's moderate demand for the 2-yr offering.
8:13 AM The Treasury will sell $34B 5-yr Notes, results at 1:00 p.m. ET, and comes after yesterday's moderate demand for the 2-yr offering.
8:12 AM In economic news, January Case Shiller 20-city Home Price Index (annualized) at 9 a.m., March Consumer Confidence at 10.
8:11 AM WTI oil $48.24/barrel, +$0.52.
8:10 AM 10-yr T Note yield 2.37%, near unchanged.
8:10 AM U.S. dollar index 99.04, +0.07.
8:08 AM MBS open near unchanged as the market searches for the next catalyst to push prices higher.
8:02 AM Stock futures point to a lower open and if the Dow closes lower today, it would be nine straight losing sessions, something it has not done since 1978.

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.

Contact

John Marbury
jmarbury@nationalbankofcommerce.com
NMLS# 740833
Phone:205-266-5669
Fax: 866-217-4174

813 Shades Creek Parkway
Birmingham, Alabama 35209
 

Mission Statement

As a loan officer (mortgage broker 1989-2006) since 1985, I have seen a lot of changes over the years. The only consistency in the mortgage business and life is change. This is the reason that we believe it is necessary to move quickly and to be early. Let us know if you have any questions or if we can help in any way.

Sign Up Now!