Friday, December 20, 2019

Daily Market Report 12/20/19 The Q3 GDP remained unchanged for it's final revision at 2.1%.  This indicates the economy is still growing at a modest pace, which is especially important due to the Trade negotiations with China during this period.  Personal Income rose by 0.5% in November.  Consumer Spending rose by 0.4% in November.  The Personal Consumption Expenditure rose 0.2% MoM, whereas, it's YoY rose from 1.4% tp 1.5%.  The Core PCE (this is what the Fed uses when it gauges Consumer Inflation) rose only 0.1% MoM and it's YoY dropped from 1.7% to 1.6%.  The Fed's Target Rate is 2.0%, so this shows a very tame inflation report.  The Consumer Sentiment Index improved from 99.2 to 99.3 in December.  Stocks are still breaking new highs, so be cautious for any pull back on consolidation/profit taking.  MBS is currently Up 5bps.  Between yesterday's positive movement and today's, then some Lenders may price in Mortgage Rates a little better today.  I'd say you'd find it from Unchanged to slightly better.  Yields are currently at 1.92%.  The ceiling ahead is currently at 1.97%.  I think it's very possible that we could test it before we see any possibility of a pull back that would help MBS and Mortgage Rates.

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