Friday, April 3, 2020

Daily Market Report 4/3/30

http://MikesDailyMarketReport.com: Non-Farm Payrolls reported 701k job losses for the month of March.  This was much higher than estimates, anywhere between 80k-150k job losses, as the sample data used for this model were derived from March 12, which was prior to the full scope of the coronavirus crisis.  Also, Unemployment Rate jumped up to 4.4%.  Average Hourly Earnings rose 0.4% in March, which we believe this was skewed as lower salary employees being let go first.  The next 2 reports are on the Services Industry, which in these reports any number above 50 is expansion/optimism; whereas, anything below it, is contraction/pessimism.  The Markit Services PMI dropped from 49.4 to 39.8; while the ISM Non Manufacturing Index dropped from 57.3% to 52.5%.  Stocks are Down on the Job data today, but the rise of Oil prices is helping it not to really sink.  The price per barrel rose approximately from $20 yesterday to $27 today, as Russia and Saudi Arabia agreed to cut back on production by approximately 6 million barrels/day.  This sector (energy) was struggling as their value rapidly dropped approximately 60% and was mentioned as a possible stimulus recipient.  Meanwhile, MBS is Up 28bps this morning, which would normally be an improvement in Mortgage Rates, but we're still not seeing Lenders price accordingly.  However, I'm hearing that we may start to see some improvement in that area within days now.  Fingers crossed!  Yields are down to 0.58%.

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Thursday, April 2, 2020

Daily Market Report 4/2/30

http://MikesDailyMarketReport.com: The Weekly Initial Jobless Claims doubled the amount of people applying for unemployment benefits from previous week, as it went from 3.3 million to 6.6 million; so, in 2 weeks we have approximately 10 million people applying for Unemployment!  Factory Orders were flat for February.  Stocks are Up this morning on news that Saudi Arabia and Russia are agreeing to cut back oil production by at least 10 million barrels, as the price of oil has dropped 2/3 since earlier this year.  The price per barrel now is approximately $20/barrel; whereas, it was approximately $60 in January.  Of course, gas prices are low, but we cannot drive anywhere :(  MBS is Up 28bps, which would technically improve Mortgage Rates, but Lenders are still propping up rates in order to get thru their backlog of transactions.  Yields started the morning lower, but it now up to 0.60%.  If you're a Real Estate Investor, then you'll want to watch the video on new changes to guidelines that will greatly impact your mortgage qualifications.

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Wednesday, April 1, 2020

Daily Market Report 4/1/20

http://MikesDailyMarketReport.com:  The ADP Employment Report will be the first of 3 Jobs reports we'll receive for the month of March.  For the month of March, the ADP reported there were 27k job losses.  We also see Manufacturing slip in March, as the Markit Manufacturing PMI slips to 48.5 and the ISM Manufacturing Index slipped to 49.1%.  However, it wasn't as bad as forecasts, which were expecting in the low to mid- 40 range.  Construction Spending dipped 1.3% in February.    Stocks are Down this morning on new projections of the Death rate in the US to be expected around 100k - 240k.  President Trump warned that it could be "very, very painful" for the next 2 weeks.  MBS was down most of the morning, but just recently popped Up 2bps.  The recent drop in the MBS Market is helping Lenders to complete their pipeline, which will take some time due to the volume. This is reducing the amount of Margin Calls out there.  Meanwhile, Yields have fallen about 10bps to 0.60%.

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Tuesday, March 31, 2020

Daily Market Report 3/31/20

http://MikesDailyMarketReport.com: The Case Shiller National HPI rose from 3.7% in December to 3.9% in January.  Manufacturing dipped a little further in contraction for the Chicago region, as the Chicago PMI went from 49.0 to 47.8 (below 50 is considered contraction); however, this was better than most of the estimates, which ranged from 35 to 40.  The Consumer Confidence remained relatively high, considering the current circumstances, as it came in at 120.0.  Stocks are Up this morning on the Manufacturing data and China's Manufacturing and Services data; however, some speculate their numbers to be too good to be true, as they jumped from approximately 30 to 51.5 MoM, and they're not at full optimum capacity, as prior to the pandemic.  Needless to say, the were impressed with the progress.  MBS closed down 66bps yesterday, and is currently Down 14bps today.  The Fed had scheduled to purchase approximately $40 billion of MBS yesterday, but only purchased about $20 billion.  Last week, MBS was propped up by the Fed, as they averaged around $40 billion daily purchases.  We think they're just trying to do enough, at this point, to keep MBS afloat and not disrupt the Lending process.  This is good because the sooner the Lenders can clear thru their pipeline, then they can reallocate funds to pricing new loans at "true" Market rates and hopefully bring back some of the Non QM and Jumbo loans.  Yields are not sitting at 0.69%.

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Monday, March 30, 2020

Daily Market Report 3/30/20

http://MikesDailyMarketReport.com: Pending Home Sales slowed in February, as it's MoM dropped from 5.3% to 2.4%.  This number will most likely continue to decline as we all experienced a major and quick shift in the Market over the coronavirus.  Stock Market is Up today.  The coronavirus is having a major impact and we're seeing a very large amount of infected and deaths from it.  MBS is Up 44bps, but has been shrinking a bit as I've been putting this report together for you and trying to remain above the ceiling of resistance.  MBS is being propped up from the Fed's daily purchases (QE), which they're trying to help the Market, but it's inadvertently hurting Lenders in the process because of their Margin calls.  We're still not seeing pricing that correlates with the MBS Market, and many loan programs (like Jumbos and Non QM) have dried up; and the Government loans (FHA, VA and USDA) have tougher restrictions (like higher minimum fico scores and lower Debt-to-income ratios).  This will be worked thru, but it's going to take some time to get this sorted.  Meanwhile, Yields have fallen some more, down to 0.60%.

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Friday, March 27, 2020

Daily Market Report 3/27/20

http://MikesDailyMarketReport.com: We have a few economic data to review today, which we'll start with the Personal Income, which rose 0.6% in February; along with Consumer Spending, which rose 0.2% in February.  The Fed's favorite gauge for Inflation is the Personal Consumption Expenditure, actually the Core PCE (without food or energy, as they're uncontrolled variables).  The PCE rose 0.1% MoM, and it's YoY remained Unchanged at 1.8%.  The Core PCE rose 0.2% MoM, and it's YoY rose from 1.7% to 1.8%.  This is still under the Fed's target rate of 2.0% and most likely will dip in the coming months, as there's no inflationary pressure currently.  Lastly, the Consumer Sentiment dropped (expected) from it's earlier report of 95.9 to 89.1.  Stocks are deep in the Red this morning, as Investors are worried that the US coronavirus cases may have exceeded China's.  The Stimulus Package is currently with the House for their Vote today.  Pelosi is confident it will pass, as there have been some rumblings from some in the party that they may block it.  Fingers crossed that it moves along.  MBS is currently Up 77bps, which would technically help Mortgage Rates; but instead, it's exacerbating an issue with Lenders on Margin calls.  This is being done inadvertently by the Fed, as they continue to purchase MBS and Treasuries.  It would normally help us, but this is not good timing for the Lenders to handle this.  Meanwhile, Yields have fallen down to .74% now.

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Thursday, March 26, 2020

Daily Market Report 3/26/20

http://MikesDailyMarketReport.com: Initial Jobless Claims for last week exceeded it's estimate of 2.5 million, which it came in at 3.283 million.  The previous record was 695k in 1982; and the highest it reached during the past Credit Crisis, a decade ago, was 655k; so, you can see how much of an impact this pandemic has made on our economy compared to previous economic crisis.  The 4th Quarter GDP remained unchanged, as it's final number remains at 2.1%.  Stocks are Up this morning, after being in Negative Territory, as the Senate passed the Stimulus package.  Next it will go to the House on Friday; and if it passes there, then onto the President to be signed this weekend.  MBS has had some large swings this morning, as it's figuring which direction to move.  It's currently Up 27bps.  Because of the large swings this moring, it will be difficult to determine Mortgage Rates.  I plan to work on a video going over what's happening in the Mortgage Industry, as many people are being affected, and I see lots of misinformation being stated by the Media and others.  There are lots of reports of Mortgage Rates dramatically dropping, but Lenders offering these much lower rates that is being reported.  I want to explain why and what to expect, so stay tuned.  Yields have dropped to 0.80%.

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