May 17th, 2017
Today's Observations: The following is a link to an interesting CNBC article about the inventory of homes for sale: http://www.cnbc.com/2017/05/17/real-estate-ceo-record-low-housing-inventory-is-freaking-us-out.html
The Mortgage Bankers Association (MBA) reports that homeowners are getting better at paying their mortgages as loans in the process of foreclosure are at the lowest levels since 2007. The MBA's latest National Delinquency Survey showed that delinquency rates for mortgage loans on one- to four-unit residential properties declined to 4.71% of all loans outstanding at the end of the first quarter of 2017. The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure.
U.S. Stock markets are plunging today on concerns that political turmoil out of the White House could derail President Trump's pro-growth agenda. The Dow Jones Industrial Average was down nearly 300 points in early trading on Wall Street, the worst losses in two months. Stocks rallied sharply after the November election on promises that the new administration would usher in tax reforms, reduced regulations and the aforementioned pro-growth policies. However, those new policies are now seen as a concern, which is casting doubt over the Stock markets, which usually leads to a sell-off.
The New York Federal Reserve reports that household debt has reached new peaks driven by gains in mortgage, auto, and student debt. The latest Quarterly Report on Household Debt and Credit reveals that total household debt achieved a new peak in the first quarter of 2017, rising by $149 billion to $12.73 trillion — $50 billion above the previous peak reached in the third quarter of 2008. Balances climbed in several areas: mortgages, 1.7 percent; auto loans, 0.9 percent; and student loans, 2.6 percent. Credit card balances fell 1.9 percent this quarter.
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.
|Commentary at the close: U.S. Stocks fell off a cliff today touched off by political turmoil in the Trump administration as investors took the opportunity to take some much needed profits with the major indices near all-time highs. Investors sought out the safe haven of the Bond markets and pushed yields considerably lower from the highs seen just yesterday. The Fannie Mae 30-yr 3.5% coupon rose to 103.19, up 50bp points, off the session high. The Dow plunged 372.82 points to 20,606.93, the NASDAQ fell by a whopping 158.63 points to 6,011.23, while the S&P 500 fell by 43.64 points to end at 2,357.03. The political turmoil raised concerns that President Trump's pro-growth agenda could be derailed. WTI oil settled at $49.07/barrel, up $0.41. The 10-yr T Note yield fell to 2.22% from yesterday's high of 2.36%. Weekly Initial Jobless Claims and the Philly Fed will be released tomorrow.|
|Wed, May 17 4:02 PM Stocks plunge on the political turmoil out of Washington. Dow -370 points. Flight-to-quality takes hold. 10-yr yield declines to 2.21% from yesterday's high of 2.36%.|
|Wed, May 17 2:18 PM Dow -310 points.|
|Wed, May 17 1:38 PM MBS at best levels that they have seen a few times in the past six months. If you look at the chart in a six-month view, you can clearly see that when prices touch current levels, they quickly decline. Be on guard.|
|Wed, May 17 1:04 PM At midday, MBS holding solid gains. Dow -255 points. 10-yr yield 2.23%|
12:00 PM ET 3.5% Fannie Mae 30-yr coupon up 38 bp at a price of 103.06 up 0 bp when rates were set today at 10:00 am Open 102.81 High 103.09 Low 102.81
Numbers to watch for: 102.28 50 & 100 day moving average the market considers a buying opportunity
102.67 25 day moving average the market considers a selling opportunity
|Wed, May 17 11:16 AM Household debt reaches new peak driven by gains in mortgage, auto, and student debt, reports the New York Federal Reserve.|
|Wed, May 17 10:55 AM The NYSE is 225-years old today founded at the corner of Broad and Wall Street in lower Manhattan, New York.|
|Wed, May 17 10:46 AM The MBA says homeowners keep getting better at paying their mortgage.|
|Wed, May 17 9:58 AM Stocks losses accelerate, Dow -224 points.|
|Wed, May 17 9:43 AM The U.S. dollar index continues to decline, now at 97.76, -0.23 due to the firing of FBI Director Comey, weaker than expected Retail Sales and tame CPI and as the probability of an interest rate increase at the June FOMC meeting declined. Fed Fund Futures are indicating a 73.8% chance of an increase, down from near 90% last week.|
|Wed, May 17 9:32 AM Stocks plunging at the open.|
|Wed, May 17 9:12 AM Goldman Sachs says there is no bubble for U.S. home prices.|
|Wed, May 17 8:57 AM The Fannie Mae 30-yr 3.5% coupon rises above resistance one (R1) at the 25-day Moving Average of 102.69 ... now at 102.94, a bullish sign.|
|Wed, May 17 8:41 AM There are no economic reports due for release today.|
|Wed, May 17 8:32 AM The MBAs purchase index -2.7%, refi index -5.7%.|
|Wed, May 17 8:30 AM The MBAs Market Composite Index, a measure of total mortgage loan application volume, declined 4.1%.|
|Wed, May 17 8:29 AM The FHA 30-yr fixed mortgage rate at 4.11% from 4.09% with 0.37 points.|
|Wed, May 17 8:26 AM For jumbo mortgage loans, 30-yr near unchanged at 4.23% with 0.30 points.|
|Wed, May 17 8:24 AM WTI oil $48.84/barrel, near unchanged.|
|Wed, May 17 8:24 AM The MBA reports that the 30-yr fixed conforming mortgage rate unchanged at 4.23% with 0.37 points.|
|Wed, May 17 8:23 AM Bank stocks edge lower led by a decline from Goldman Sachs and Bank of America.|
|Wed, May 17 8:21 AM MBS begin the day with solid gains. 10-yr T Note yield declines to 2.28% from yesterday's close of 2.32%.|
|Wed, May 17 8:19 AM Bond prices open higher on lower Stock futures as concerns over Trump spook investors.|
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