Friday, March 1, 2019

Daily Market Report 3/1/19 We have a lot of data on the Economic Calendar today.  We're still facing delays on much of the data due to the past Gov't Shutdown.  Personal Income rose 1.0% in December; however, Consumer Spending dropped 0.5%.  PCE rose only 0.1% in December, while it's YoY dropped from 1.8% to 1.7%.  The Core Inflation rose 0.2%, while it's YoY remained at 1.9%.  This is the Fed's favorite gauge for inflation and the Core is within it's 2.0% Target Rate.  Markit Manufacturing PMI dropped from 53.7 to 53.0 in February, while the ISM Manufacturing dropped from 56.6% to 54.2%.  Consumer Sentiment dropped from 95.5 to 93.8 in February.  Stocks started the morning off very hot, but have since cooled off and well off it's earlier highs.  Reports that the US/China Trade Agreement may be completed within the next week or two is what heated up the Market.  MBS is down 8bps this morning, and broke below it's 25- & 50 DMA while testing it's Fibonacci floor at 101.856.  Some Lenders may price Mortgage Rates a little higher today.  We're watching to see if MBS can remain above the Fibonacci level, as it will begin the trend for Mortgage Rates to rise.  Yields are now up to 2.74% and are now above it's 25- & 50 DMA, which is applying the pressure to MBS.

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