April 26th, 2017
End of the day commentary: MBS traded in the red for most of the session but got a boost near the end of the day on growing tensions with North Korea. There were no economic reports released today. The Fannie Mae 30-yr coupon closed at 102.62, +16bp after hitting 102.38 earlier in the session. Stocks ended lower after the Trump tax plan was announced ... the old buy on the rumor and sell on the news. The Dow fell 21.03 points to 20,975.09, the NASDAQ was unchanged at 6,025.22, while the S&P fell by a modest 1.16 points to end at 2,387.45. WTI oil closed near uncharged at $49.62/barrel, but fell into negative territory in after hours trading. 10-yr T Note yield 2.30%. Tomorrow's economic data includes Durable orders, Weekly Initial Jobless Claims, and 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.
|Wed, Apr 26 4:02 PM The White House says China sees North Korea as a threat. Stocks close lower. MBS at session highs.|
|Wed, Apr 26 1:49 PM Trump plan repeals state and local tax deductions.|
|Wed, Apr 26 1:43 PM Trump tax plan repeals 3.8% Obamacare tax.|
|Wed, Apr 26 1:42 PM Top individual tax rate 35%, corporate tax rate 15%, repeals AMT.|
|Wed, Apr 26 1:41 PM Trump tax plan protects home ownership deduction.|
|Wed, Apr 26 1:38 PM Trump tax plan calls for repeal of estate tax.|
|Wed, Apr 26 1:13 PM The $34B 5-yr Note auction garners a "C" rating.|
|Wed, Apr 26 1:10 PM Trump admin mulling order on NAFTA withdrawal, says Politico.|
|Wed, Apr 26 12:54 PM At midday, MBS near unchanged. Stocks higher ahead of the tax plan headlines. 10-yr yield 2.33%.|
|Wed, Apr 26 12:00 PM JPMorgan has reduced its Q1 U.S. GDP growth estimate from 0.6% to 0.4%|
|Wed, Apr 26 11:52 AM The S&P trades with small gains ahead of the new tax plan from the White House, scheduled for around 1:00 p.m. ET.|
|Wed, Apr 26 11:34 AM Redfin, a national real estate brokerage, reports that right now may be the strongest sellers market for homes ever. Demand from homebuyers fell 14% in March from February.|
|Wed, Apr 26 11:33 AM Spreads between MBS and Treasuries little changed from the open.|
|Wed, Apr 26 11:27 AM Oil prices reverse and trade higher after a report showed that stockpiles fell more than expected. WTI oil at $50/barrel, +$0.44.|
|Wed, Apr 26 10:44 AM|
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.03% from 4.09%.
|Wed, Apr 26 10:43 AM MBA reports that the 30-year fixed-rate mortgages with jumbo loan balances remained unchanged from 4.15%.|
|Wed, Apr 26 10:41 AM The MBA reports that the 30-yr fixed conforming mortgage rate fell 2bp to 4.20% from 4.22%, lowest since November 2016.|
|Wed, Apr 26 10:39 AM The MBA's Market Composite Index, a measure of total mortgage loan application volume, rose 2.7% in the latest week.|
|Wed, Apr 26 10:39 AM The MBAs refinance index +7%, purchase index -1%.|
|Wed, Apr 26 9:40 AM The New York Fed was set to purchase up to $1.45B in 30-yr Fannie/Freddie 3.5% and 4% coupons beginning at 9:00 a.m. ET, but the operation seems to have had little impact on prices.|
|Wed, Apr 26 9:38 AM Stocks slightly higher soon after the opening bell.|
Wed, Apr 26 8:39 AM WTI oil -$0.45 to $49.11/barrel.
Wed, Apr 26 8:36 AM Treasury Secretary says 3% GDP very achievable.
Wed, Apr 26 8:35 AM U.S. dollar index 99.04, +0.39.
Wed, Apr 26 8:29 AM Treasury Secretary Mnuchin live from Washington says this could be the largest tax reform in history.
Wed, Apr 26 8:24 AM S&P futures hug near the flatline ahead of President Trump's plan on tax reform which is expected sometime around 1:00 p.m. ET.
Wed, Apr 26 8:14 AM MBS open near unchanged following the steep decline since last Tuesday where the Fannie Mae 30-yr 3.5% coupon has lost nearly 100bp
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