June 2nd, 2017
Suggestion: A weak headline number from Non-farm payrolls sent Mortgage Bonds higher today and right at resistance. Locking is advised.
This Week's Newsletter:
Overview: The Labor Department reported that Non-farm Payrolls rose by 138,000, below the 185,000 expected. March and April numbers were revised lower by 66,000. The Unemployment Rate fell to a 16-year low of 4.3% and is at a new post-crisis low. The Labor Force Participation Rate declined to 62.7% from 62.9%. Total unemployment, or the U6 number, fell to 8.4%, down from 9.4% last year. Rounding out the report, average hourly earnings rose 0.2% versus the 0.3% expected and up 2.5% from May 2016. The average workweek was steady at 34.4.
Wal-Mart thinks it could close the gap in its fight against on line behemoth Amazon by way of its own employees. Wal-Mart has started a test that has its employees deliver local packages to customers on there way home from work. Employees will be paid extra for the deliveries and offered overtime pay as necessary. However concerns over the risk, cost and liability associated with such deliveries have come up. Wal-Mart had revenues of $486 billion in 2016, but still pay $10 hour for a big chunk of workers. A industry advocate for workers said "instead of Wal-Mart paying its workers what they deserve for their work, Wal-Mart is merely offering to pay more — for more work."
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.
|Weak headline job numbers sent Bond prices higher today, while Stocks shrugged off the weak data as the Dow, S&P and NASDAQ all closed at record high levels. Non-farm Payrolls rose by 138K vs the 185K expected while March and April were revised lower by a total of 66K. The Bond closed at 103.38, +25bp. The Dow gained 62.11 points to 21,206.29, the S&P was up 9.01 to 2,439.07, while the NASDAQ rose by 58.96 points to 6,305.79. WTI oil closed at $47.66/barrel, -$0.77. 10-yr T Note yield 2.15%. Next week's economic calendar is on the light side. Have a great weekend!|
|Fri, Jun 02 2:26 PM Mortgage Bonds trade in a tight range for the past few hours.|
|Fri, Jun 02 1:30 PM Wall Street at record levels despite tepid jobs report.|
|Fri, Jun 02 1:00 PM At midday, MBS higher, off best levels. S&P, Dow and NASDAQ looking to hit fresh record closing highs today. 10-yr yield 2.15%.|
|Fri, Jun 02 12:48 PM Fed's Harker says he still sees three rate hikes this year, calls May payrolls number "good".|
|Fri, Jun 02 11:34 AM The New York Fed is in the market purchasing MBS, prices back at session highs.|
|Fri, Jun 02 10:52 AM Stocks push into positive territory.|
|Fri, Jun 02 9:34 AM The New York Fed will purchase up to $1.625B in Fannie/Freddie 30-yr 3.5% and 4% coupons beginning at 11:15 a.m. ET to 11:45 a.m. ET.|
9:32 AM ET 3.5% Fannie Mae 30-yr coupon up 28 bp at a price of 103.41 up 34 bp when rates were set yesterday at 10:00 am Open 103.19 High 103.47 Low 103.09
Numbers to watch for:
Currently Buying Opportunities for Traders
102.69 50 day moving average
102.80 25 day moving average
103.00 Traders keep their eye on round numbers and this is one them with lots of zeros
103.12 Traders keep their eye numbers that have been resistance or support in the past. This is one of them.
Currently Selling opportunities for Traders
103.24 200 day moving average
103.59 High of 11/17/16
|Fri, Jun 02 8:54 AM WTI oil at $47.20/barrel, -$1.16.|
|Fri, Jun 02 8:53 AM 10-yr T Note yield falls to 2.17% from the earlier high of 2.22%.|
|Fri, Jun 02 8:46 AM The Labor Force participation Rate (LFPR) falls to 62.7% from 62.9% in April. The LFPR is the percentage of the population that is either employed or unemployed (that is, either working or actively seeking work) People with jobs are employed. People who are jobless, looking for a job, and available for work are unemployed.|
|Fri, Jun 02 8:45 AM MBS hit session highs after the weak headline Non-farm Payroll number.|
|Fri, Jun 02 8:41 AM Total unemployment, or the U6 number, fell to 8.4%, down from 9.7% last year. U6 - total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.|
|Fri, Jun 02 8:39 AM Average hourly earnings 0.2% in May vs the 0.3% in April, +2.5% from May 2016.|
|Fri, Jun 02 8:37 AM The Unemployment Rate falls to 4.3%, a 16-yr low.|
|Fri, Jun 02 8:36 AM Non-farm Payrolls in March and April revised lower by 66K.|
|Fri, Jun 02 8:33 AM 138K jobs created in May, below the 185K expected.|
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 subscribers of www.themortgagemarketguide.com The cost of subscription is very reasonable.