Daily Market Report 10/31/19

http://MikesDailyMarketReport.com: Happy Halloween!  The Weekly Jobless Claims rose to 218k last week; and the previous week's data was revised higher by 1k (to 213k).  The Employment Cost Index (ECI) rose 0.7% in Q3.  This index can be a good indicator of inflation in the employment category.  Luckily, it was very tame.  The Personal Income rose 0.5% in September; while it's counter-part, the Consumer Spending rose 0.2%.  Inflation fell in September, as the PCE dropped from 1.4% to 1.3%; and the Core PCE dropped from 1.8% to 1.7%.  This is the Fed's favorite gauge for inflation, and their Target rate is 2.0%, so we're below it.  Manufacturing worsened in the Chicago region, as the Chicago PMI further contracted from 47.1 to 43.2 in October.  Anything below 50 is considered Contraction Territory; as anything above, is considered Expansion.  Stocks are down this morning on news that an Chinese Official expressed doubts that a long-term deal can be done.  President Trump tweeted that they are on schedule to sign the first phase of the agreement and name a new location to meet, as it was cancelled in Chile due to ongoing riots, next month.  MBS has really rallied these past 2 days, which they're Up 23bps so far this morning; breaking above it's 100-, 25- and 50- DMA.  Mortgage Rates received a nice boost.  Yields have tumbled all the way down to about 1.70% now.

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Daily Market Report 10/30/19

http://MikesDailyMarketReport.com: The ADP Employment reported 125k new jobs for October, which is up from 93k in September; however, September was revised lower by 42k from it's initial report.  The Q3 GDP dropped slightly from it's annual pace of 2.0% to 1.9%, which is better than expectations of 1.6%.  This is pretty good, as the Trade Negotiations have been taking a toll on our economy, and slowing many industries.  The FOMC will wrap up their 2 day meeting today and provide their announcement at 11am PST, then Fed Chair Powell will have his press conference at 11:30 am PST.  It is widely expected that the Fed will cut it's Fed Funds Rate by a 0.25% for the 3rd time this year..  Investor will heavily listen to the Fed today, as they will gauge any further hikes and the Fed's thoughts.  Many are thinking that the US and China talks are progressing, then the Fed may hold on further cuts.  They need to hold some ammo, if/when we reach an recession; otherwise, there's not too many tools to help stimulate an economy available.  Stocks are moving in Mixed Territory, as they've been dipping their toes (in all 3 indices) in both Positive and Negative Territory this morning ahead of the FOMC Announcement.  Q3 Corporate Earnings continue to come in relatively good on lower expectations.  MBS is Up 16bps, so Mortgage Rates are better this morning.  Be careful today, because if the Fed says anything inflationary, then it could reverse very quickly, as the greatest enemy to MBS is inflation.  Mortgage Rates and Fed Funds Rate don't always move in same direction.  When there are Fed cuts, then many times, Mortgage Rates rise due to concerns of inflation.  Yields are trying to stay above it's 100 DMA, but are currently just underneath at 1.81%.  It's next level is the Fibonacci, which may be strong, as it was holding as a ceiling for many tries to break above.

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Daily Market Report 10/29/19

http://MikesDailyMarketReport.com: The Case Shiller HPI improved from 3.1% YoY in July to 3.2% YoY in August.  This is a direct correlation, as to when interest rates began to dip, which helped Housing Prices.  The Consumer Confidence Index dropped a little, from 126.3 to 125.9 in October.  Pending Home Sales continue to improve, as it increased 1.5% in October from the previous month.  Stocks are trading in Mixed Territory, as NASDAQ is alone in the Red this morning.  Q3 Corporate Earnings Reports continue to dictate the Markets. Today is the start of the FOMC's 2 day meeting, which they will provide their statement tomorrow at 11:15am PST.  It is widely expected they will cut the Fed Funds Rate by 0.25% for the 3rd consecutive meeting.  MBS rebounded slightly to +2bps.  Yesterday, it closed higher than it's lows.  Coupled with that improvement, Mortgage Rates will see a slight improvement in their pricing today.  Yields are still hanging around the 1.85% level.

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Daily Market Report 10/28/19

http://MikesDailyMarketReport.com: There are no economic data to report from the Calendar today.  Stocks are Up this morning on more positive Q3 Corporate Earnings Reports.  It's been reported that the US and China are nearing completion some sections of an Agreement.  Also, the UK received their extension for Brexit until end of the year.  MBS is Down 20bps, which will lead to Mortgage Rates to rise a bit today.  Yields have spiked above it's 100 DMA (and above the Fibonacci level on Friday's close), which they're currently sitting at 1.85%.

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Daily Market Report 10/25/19

http://MikesDailyMarketReport.com: Consumer Sentiment dropped a little in October, from 96.0 to 95.5.  Stocks are Up this morning.  Still taking it's lead from Q3 Earnings Reports.  In general of those that have reported, about 75% to 80% have hit or exceeded expectations.  EU is still working on a path for Brexit after Macron voted against an extension to the UK.  China has asked the US to cut planned Tariffs in which they'll buy more agriculture. Next week will be a full week with Jobs data and the FOMC.  MBS is Up 5bps and still running parallel to the 100 DMA, as it's trying to climb above it.  Mortgage Rates remain Unchanged.  Yields are also trying to climb above it's Fibonacci level and sitting at 1.77%.

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Daily Market Report 10/24/19

http://MikesDailyMarketReport.com: Weekly Jobless Claims dropped from 218k (was revised higher by 4k) to 212k.  Durable Goods Orders dropped by 1.1% in September and dropped by 0.3% when you exclude Transportation.  New Home Sales dropped from 706k (was revised lower from 712k, which was a 12 year high) in August to 701k in September.  YoY it is up 15.5%.  Yet the Media is portraying and manipulating this data to make it sound bad!  Go figure!  Markit Manufacturing PMI flash rose from 51.1 to 51.5 in October; while it's counter-part, Markit Services PMI flash rose from 50.9 to 51.0.  Stocks started the morning in Positive Territory, but currently the DOW shifted into Negative Territory.  Today is a big day for Q3 Corporate Earnings, which a few big companies missed their numbers.  Today was the final Policy Meeting for Mario Draghi, whom will be replaced next week by Christing Lagarde, whom was former head of IMF.  She could change policy and make it less accomodating and spark Global Yields.  If this occurs, then it could add pressure to MBS and raise Rates.  Germany is still struggling, as an economy.  Their Manufacuring PMI, which was a decade low at 41.7 to 41.9 (well into contraction levels).  MBS is trying to break above the 100 DMA and is currently Up 6bps, but it's not enough to change Mortgage Rates pricing today, as they remain Unchanged.  Yields are near the same levels at 1.75%.

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Daily Market Report 10/23/19

http://MikesDailyMarketReport.com: The FHFA Home Price Index rose only 0.2% MoM in August, which it's YoY dropped from 5.0% to 4.6%.  This index factors homes with conforming loan limits.  Stocks started the early trading in the Red, but the DOW has since broke into Positive Territory.  There were a few disappointing reports that came out today, which is what's driving the Market today.  Also, the UK Parliament voted against the new Brexit Agreement, so most likely the EU will extend the departure until end of the year.  MBS is currently Up 8bps.  Coupled with yesterday's gains, then Mortgage Rates will price out a little better this morning.  It's approaching the 100 DMA and may make a position to try and fight it's way back above it.  Yields have slid down to 1.74% and below it's Fibonacci level.  As I mentioned the last 2 days, it appears that the Stochastic charts are indicating a possible trend reversal, which will help improve bonds and Mortgage Rates.  We'll need to continue watching this, as it could potentially move in a sideways pattern.

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Daily Market Report 10/22/19

http://MikesDailyMarketReport.com: Existing Home Sales dropped a bit in September, going from 5.49 million annualized units to 5.38 million in September.  We will receive the New Home Sales on Thursday.  Investors will be primarily watching the Q3 Corporate Earnings Reports, which have (for the most part) been pleasant.  The talks between US and China have been at a slow pace, so Investors will spend more time the Q3 Reports.  MBS is currently Up 6bps.  We had a price adjustment yesterday, which led to Mortgage Rates to rise a bit.  Mortgage Rates are Unchanged from yesterday's close, but slightly higher than yesterday's open.  The MBS broke below it's 100 DMA, but we may get some relief soon, based on the Stochastic Graph, which shows a possible Trend Reversal.  Meanwhile, Yields have pulled back slightly to 1.77% and sitting at it's Fibonacci level.

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Daily Market Report 10/21/19

http://MikesDailyMarketReport.com: There is no economic data to report today, which will be a relatively light week for it.  We'll receive data on the Existing Home Sales tomorrow.  Stocks are in Mixed territory, as the DOW has been bouncing between Positive and Negative Territory this morning.  The US and China are working their way thru a Phase 1 portion of a Partial Trade Agreement.  UK Politics is forcing the PM to request another 3 months extension from the EU regarding Brexit.  We're in the middle of the Q3 Corporate Earnings Reports, which have been fairly decent.  MBS is trying to fight it's way back above it's 100 DMA.  It's currently down 9bps, so Mortgage Rates remain Unchanged, but very close to worsening.  If it cannot rise above the 100 DMA, then it has another 50bps space to drop further, which will translate to approximately .25% interest rate increase.  Yields are fighting to break above it's Fibonacci level and is sitting at 1.78%.

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Daily Market Report 10/18/19

http://MikesDailyMarketReport.com: Leading Economic Indicators continue to decline, which it's MoM into September dropped 0.1%.  Stocks are trading in Negative Territory this morning on bad economic news out of China, which shows their Economy slowing more rapidly than anticipated.  Q3 Corporate Earnings continue to report decent reports, which pleases the Investors; and various Fed Members continue with their speeches.  MBS has been trending lower and have been pushing against it's floor of support at the 100 DMA, which has been a strong support.  It's currently Unchanged from yesterday's close, so Mortgage Rates (also) remain Unchanged.  Like it's counter-part, Yields have been pushing up against it's Ceiling of Resistance, which is a Fibonacci level.  This level has been very strong.  It's currently sitting at 2.75%.  I'm watching the stochastic charts, which may indicate a near trend reversal.  It's not clear yet, but it does look like there may be a possibility.

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Daily Market Report 10/17/19

http://MikesDailyMarketReport.com:  The Weekly Jobless Claims rose a little bit to 214k, which this week's data is important, as it's being used by the Bureau of Labor Statistics (BLS) as part of it's Job Numbers.  The numbers for both Housing Starts and Building Permits look on the surface a bit disappointing, but they're not as bad as they appear.  I'll explain.  Augusts numbers for both indexes were revised a little higher; also, the drop-off in both indexes were due to a decline in Multi-Families, whereas, single families were up a little bit.  If you dig a little deeper into the numbers, then it's not THAT bad!  So, Housing Starts dropped from the revised 1.39 million to 1.26 million.  Building Permits dropped from 1.43 million to 1.39 million.  Philly Fed, which measures the manufacturing around the Philadelphia region, dropped from 12.0 to 5.6 in October.  Industral Production declined 0.4% in September.  Capacity Utilization dropped from 77.9% to 77.5% in October.  Stocks are Up in early trading today.  We've been seeing fairly decent Q3 Earnings Reports thus far, even though it's relatively early in the releases.  There was an announcement that there may be a Brexit Deal in the works, which will still need to be voted by both sides' voting member.  The US and China are working out the language in Phase 1 of their Trade, as the US postponed the increase in Tariffs the other day, which China will increase their Agricultural products (estimated between $40-$50 Billion).  However, there is a Bill being introduced in the Senate that will look into a Review in Hong Kongs status, as they enjoy special treatment in terms of visas, tariffs, etc...  This is thought of being abused by the Chinese.  The Chinese has threatened to retaliate, if this Bill passes.  There are a few Fed Members speaking today, but there hasn't been any Market moving comments made by anybody.  MBS is currently down 6bps, so Mortgage Rates remain Unchanged from yesterday's pricing.  Yields are at 1.76%.

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Daily Market Report 10/16/19

http://MikesDailyMarketReport.com:  September was not kind to Retail Sales, as they report a contraction of 0.3% in September; and when you exclude big ticket items, like Autos, then they dropped 0.1%.  This report increased the likelyhood of the Fed cutting rates at it's next FOMC from 78% to 90% chance.  Business Inventories remain unchanged MoM in August.  However, today's bright spot, lies with the Home Builder's Index, which measures the confidence level for Home Builders.  It jumped from 68 to 71 in October, which is a 20 month high. Later today, the Fed Beige Book will be released, which will give us a more Micro-Economic viewpoint of the US Economy.  Stocks are trading in Negative Territory on recent bills passed by the US House of Representatives that take aim at support for the Hong Kong Protests, which will likely lead to China's ire.  Also, the Fed has begun a form of QE by buying $65 Billion of short-term Treasuries per month in order to create more liquidity and flatten out the Yield Curve.  This was first reported by BofJ last month, in order to protect it's Banking system.  There will be a few Fed Members speaking again today.  Also, more Q3 Corporate Earnings will be released, which will include Netflix, which many investors are awaiting.  Meanwhile, MBS is Up 11bps, which may lead to Lenders to provide better pricing on Mortgage Rates, compared to where we closed yesterday.  There was a weakening in the Market yesterday, so Rates worsened in the late morning (PST).  Yields are down only 1bps to 1.76%.

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Daily Market Report 10/15/19

http://MikesDailyMarketReport.com: Manufacturing improved a bit in the NY region in September, as the Empire State Index rose from 2.0 in August to 4.0.  Stocks are trading in Positive Territory, as we begin the Q3 Corporate Earnings Reports.  Today, we're seeing the Financial Sector, which seems to be a bit Mixed.  We have a few Fed Members speaking today, so we'll be listening for insight into the next FOMC later this month.  MBS is currently Down 8bps, after starting the morning higher.  Mortgage Rates on the West Coast should be about the same as what we saw on Friday's close, while East Coast may see a price change for the Worst, as the start was much higher.  Yields are currently sitting at 1.76% and going up against it's next ceiling (the Fibonacci level) after surpassing it's 25- and 50 DMA.

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Daily Market Report 10/11/19

http://MikesDailyMarketReport.com: Consumer Sentiment improved in October rising from 93.2 to 96.0.  Stocks are getting a huge lift this morning on optimism for a US and China Trade Deal, as President Trump tweeted that it's going very well and he's meeting the Vice Premier today.  Also, there is some optimism in the UK after a meeting between Ireland and England on a path from the EU may be feasible afterall.  Later today, there will be a few Fed Members speaking, including Fed Member Rosengren, whom is 1 of 3 dissenters from the last FOMC.  MBS is continuing it's downward trend, as Investment dollars flow from the safe haven of bonds to equities.  MBS is down another 31bps (after closing down 37bps yesterday).  Mortgage Rates have risen as a result.  Yields are storming up the chart, and are currently at 1.75%.

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Daily Market Report 10/10/19

http://MikesDailyMarketReport.com: Weekly Jobless Claims dropped from last week's 220k number to 210k, which is a good sign for Jobs.  Also, on the agenda is Consumer Inflation by the way of Consumer Price Index, which remained Unchanged from the previous month (MoM); and it's YoY remained at 1.7%.  When you remove the Food and Energy data, then you have the Core CPI.  It rose only 0.1% MoM, but it's YoY remained unchanged at 2.4%.  This bode well for investors because they believe it will make it easier for the Fed to continue cutting rates because inflation remains under control.  Stocks are Up again this morning, as optimistic sentiment continues with China's visit to the US today to start the Trade Negotiatoins.  There are several things by both sides whom are trying to diffuse the standoff and move in a positive direction.  There are a few Fed Members  whom will be speaking today, so Investors will look for clues to the next FOMC later this month.  MBS is Down 19bps, so Mortgage Rates have risen a bit.  They're testing it's double floor of support (50- and 25 DMA).  While Yields have climbed to 1.64% and pushing Up against it's 50 DMA.

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Daily Market Report 10/9/19

http://MikesDailyMarketReport.com: It's a pretty slow day today, as we only have the FOMC Minutes being released later this morning (around 11am PST).  Stocks are rebounding this morning on new optimism between US and China Trade negotiations.  Reports are coming out that we may have a limited deal coming soon.  So, this is boosting stocks!  MBS is Down 9bps so far, after 2 days of testing it's ceiling and close in negative territory.  Stochastic Chart indicates possible trend reversal, which we have some room with MBS until we hit a double floor (25- and 50 DMA) of support.  Yields have climbed back up to 1.56%.

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Daily Market Report 10/8/19

http://MikesDailyMarketReport.com: The NFIB Small Business Index, which gauges the confidence with Small Businesses, dropped from 103.1 to 101.8.  The Producer Price Index, which measures inflation with the Wholesale Sector, dropped 0.3% MoM, which it's YoY dropped from 1.8% to 1.4%.  The Core PPI, which excludes food and energy, also dropped 0.3% MoM in September.  It's YoY dropped from 2.3% to 2.0%.  Stocks are in Negative Territory, as Investors are concerned over possible heightened tensions before the upcoming meeting between US and China.  Yesterday, it was announced that the US will Blacklist 28 companies for Human Rights Violations to Muslim Minorities in China.  Also, Bloomberg is reporting that the Trump Administration is proceeding with discussions on restrictions of investment flows into China, especially with Pension Plans.  MBS is Up 11bps this morning.  However, yesterday (around Mid-day) the Market turned and closed -8bps.  Mortgage Rates (today) will be comparable to what we saw on Friday.  Yields started the day higher, but has slid down to 1.51%.

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Daily Market Report 10/7/19

http://MikesDailyMarketReport.com: There are no economic data to report today.  The Stock Market is Down this morning on the disappointing data from last week and not feeling too optimistic ahead of this week's China/US trade negotiations, as reports are coming out that China is looking for a limited negotiation, not a full one.  So, nothing may happen this week.  MBS is Up 11bps and is currently above it's Fibonacci line.  We're approaching the same level in early September before bonds fell.  Yields are also up, which they're currently at 1.54%.

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Daily Market Report 10/4/19

http://MikesDailyMarketReport.com: The BLS' Non-Farm Payroll produced 136k jobs for September, which is down from 168k in August, and below it's forecast of 150k.  However, there was an upward revision of 45k jobs for the previous 2 months, which brought the 3 month average of 157k jobs.  This helped with Investors Sentiment.  Also, the Unemployment Rate dropped from 3.7% to 3.5% (lowest since 1969).  The Average Hourly Earnings remained Unchanged in September, which it's Yearly Average dropped from 2.9% to 2.6%.  This data may assist the Fed with their thoughts at it's next FOMC on possible Rate Cuts, as this data suggests less stress on Inflationary numbers.  Stocks are in Positive Territory after a rough week.  It's been a week of Data driven sentiment, which has been disappointing, and would have been disappointing today, if not for the revision to the prior 2 months Jobs data.  MBS is Up 11bps and right up to it's next resistance level.  Meanwhile, Yields continue downward and are sitting at 1.52% this morning.

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Daily Market Report 10/3/19

http://MikesDailyMarketReport.com: Initial Weekly Jobless Claims rose from 215k (which was revised higher from 213k) to 219k.  Tomorrow will the the BLS' September Jobs Report, which will have an Impact on the Market.  To continue with the Economic Calendar, the next 2 reports are on the Services Industry.  The Markit Services PMI remained unchanged from it's August to September data at 50.9.  However, the ISM Non-Manufacturing Index had a sharp drop from 56.4% to 52.6%.  Anything above 50 is considered expansion, and the ISM is a more closely watched report between the 2.  Factory Orders dropped 0.1% in August.  Stocks have continued their downward trend this morning on more poor economic data (ISM Services), which started the trend earlier this week on poor manufacturing and disappointing ADP data.  MBS is benefitting from the Stocks demise, as Investors are moving their investment dollars to flight of quality, and is currently Up 16bps.  It is sitting just below it's next overhead resistance.  Also, Yields are trending downward and currently resides at 1.55%.

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Daily Market Report 10/2/19

http://MikesDailyMarketReport.com: The ADP Employment Report only reminded investors on a contracting economy that we're now facing.  It's August numbers were revised lower by 38k, which went from 195k to 157k.  In September, it came in lower than expectations at 135k.  Most were expecting around 152k.  This bad news, coupled with yesterdays very bad data from ISM has Stocks plummeting.  The DOW is down more than 400 points this morning, and NASDAQ is down more than 100 points.  This is helping to push up MBS, as a flight to safety.  MBS is Up 16bps so far this morning.  Mortgage Rates are better this morning, however, some Lenders may be priced the same, as they may have priced their Rates around yesterday's high.  Yields continue it's decline and sit at 1.60%.

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Daily Market Report 10/1/19

http://MikesDailyMarketReport.com: Markit Manufacturing PMI rose just a tad in September, which it moved from 51.0 to 51.1.  However, the more important index, ISM Manufacturing Index went further into contraction mode in September, as it dropped from 49.1% to 47.8%.  This news further induced more worries over looming recession talk.  Meanwhile, Construction Spending rose only 0.1% in August.  Stocks were trading in Positive Territory to start the morning, as the Bank of Japan announced they'll pull back on their purchases of Bonds in an effort to strengthen their Banking System and boost Consumer Sentiment.  However, the Markets turned Negative after the ISM data was released.  China is celebrating it's 70th Anniversary of the People's Republic this week.  MBS had started in the hole this morning, and thus skyrocketed after the ISM news, and is currently Up 23bps.  Mortgage Rates have Improved today.  Meanwhile, Yields skyrocketed earlier in trade on news of BoJ, but quickly readjusted on the ISM data (breaking below it's 25 DMA).  It currently sits at 1.62%.

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