Daily Market Report 1/31/20

http://MikesDailyMarketReport.com:  The Employment Cost Index rose 0.7% in the 4th Qtr.  Personal Income rose only 0.2% in December (below it's forecast of 0.3%); and it's counter-part, Consumer Spending came in at forecast up 0.3%.  The Fed's favorite gauge for inflation is the Personal Consumption Expenditure (PCE), which rose 0.3% in December, as it's YoY increased from 1.5% to 1.6%.  The Core PCE (excluding food and energy) rose 0.2% and it's YoY remained Unchanged at 1.6%.  We're still under the Fed's Target rate of 2.0%.  The manufacturing in the Chicago region worsened in January, as it dropped from 48.9 to 42.9.  Anything under 50 is in Contraction.  However, Consumer Sentiment rose from it's earlier report of 99.3 to 99.8 in January.  Stocks are down this morning, as the World Health Organization declared the coronavirus a global emergency.  Stocks did a dramatic rebound yesterday, but today's sentiment thus far is negative.  MBS is currently Up 12bps, but Mortgage Rates remain Unchanged; as the stocks rebounded yesterday, the MBS closed unchanged from the previous day's close; so, we're currently at the higher levels when pricing came out yesterday.  Yields were similar, as they're down to 1.53% so far this morning.

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Daily Market Report 1/30/20

http://MikesDailyMarketReport.com: Weekly Jobless Claims dropped from the revised (+12k) previous week of 223k to 216k last week.  The revision is important because it happened on the data for the "sample" week, which will be used as part of the calculation for the Jobs numbers by the Bureau of Labor next Friday.  Q4 GDP continued at the 2.1% rate, which was the same pace of the Q3 report.  Stocks are in Negative Territory, as concerns grow over the coronavirus, which is leading the World Health Organization to meet.  We continue to see more Q4 Earnings Reports, which have been pretty positive for the most part.  MBS is Up 8bps, but Mortgage Rates continue to remain Unchanged.  Yields are down to 1.55%.

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Daily Market Report 1/29/20

http://MikesDailyMarketReport.com: Pending Home Sales dropped 4.9% in December.  If you look into the numbers, then you'll know it's due to the low inventory levels.  There's still a lot of demand!  The Fed will be giving their announcement later today.  No rate changes are expected.  The one topic that could potentially create some volatility is if the Fed talks about the Balance Sheet.  Meanwhile, Stocks are still ignoring the coronavirus and focusing on Earnings Reports.  They're currently in Positive Territory.  MBS is also in Positive Territory, as it's Up 8bps.  Mortgage Rates remain Unchanged in their pricing from yesterday, or for that matter, this week.  Yields have slid down to 1.62%.

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Daily Market Report 1/28/20

http://MikesDailyMarketReport.com:  Durable Goods Orders rose 2.4% in December, but if you remove Transportation from those numbers, then it dropped 0.1%.  The Defense made large purchases at the end of the year, which skewed the numbers abit, as business investments declined.   However, we have a few other data with more positive news, like the Case Shiller HPI rising from 3.2% in October to 3.5% in November; and Consumer Confidence rising to 131.6 in January.  The FOMC will begin their 2 day meeting today, which they will provide their announcement tomorrow.  Everything has been relatively quiet from the Fed-side of things, so nothing is really expected from them.  Unless they abruptly make any changes, then the Markets should be not affected by this event.  Stocks are regaining some of their losses after yesterday's  big selloff.  We may not see the end of the stock decline though.  This coronavirus may linger a bit longer, thus pushing stocks further down.  This is helping Mortgage Rates, as MBS is currently Up 2bps, so there's no change in pricing from yesterday's close.Yields are rebounding a bit too, as they have climbed up around 1.64%.

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Daily Market Report 1/27/20

http://MikesDailyMarketReport.com: New Homes Sales dropped in December to 694k, off from it's seasonally adjusted 697k in November.  Stocks are freefalling this morning over growing concerns of the coronavirus.  MBS is the benefactor, as it broke above it's ceiling on Friday, and is currently Up 11bps.  Mortgage Rates improved today.  Yields are also freefalling and are currently sitting around 1.61%.

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Daily Market Report 1/24/20

http://MikesDailyMarketReport.com: Markit Manufacturing PMI dropped from 52.4 in December to 51.7 in January; however, Markit Services PMI jumped up from 52.8 in December to 53.2 in January.  Stocks are in Positive Territory this morning on some good Earnings Reports from AMEX and Intel, while shrugging off the coronavirus news.  MBS is currently Up 5bps and making another run higher above the current ceiling (it closed beneath it yesterday).  Mortgage Rates remain Unchanged.  Yields continue it's slide and are hovering around 1.72% with it's next floor of support coming in at 1.67%.

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Daily Market Report 1/23/20

http://MikesDailyMarketReport.com: The Weekly Jobless Claims rose 6k to 211k for this week's report; however, these are relatively low numbers and a good indicator to the strength of the labor market.  This week's data holds more importance because it's part of the "sample" week, which is used as part of the Bureau of Labor's formula for the Jobs numbers that will be released in a few weeks.  Stocks are in the Red this morning on growing concerns over the Coronavirus, which China has locked down more cities in order to contain it, and the Death toll has reached 17 lives now.  Q4 Corporate Earnings are still being reported, and thus far, has been relatively good.  MBS is currently Up 13bps and pushing against it's ceiling of resistance.  Mortgage Rates will see some improvement in it's pricing.  Yields have fallen further and are currently around 1.72%.

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Daily Market Report 1/22/20

http://MikesDailyMarketReport.com:  Existing Home Sales rose from 5.35 million annualized units in November to 5.54 million in December.  Stocks reverse earlier concerns over the Coronavirus in China, which a report of one traveller in US was infected with it.  Stocks are Up on news that both China and US Center of Disease confirmed that this is not a pandemic and is contained.  Now Stocks are in Positive Territory.  MBS is only Up 2bps, so Mortgage Rates remain Unchanged.  Yields have slid under it's tough Fibonacci floor of support and sitting between the Fibonacci and 100 DMA, around 1.76%.

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Daily Market Report 1/21/20

http://MikesDailyMarketReport.com: There are no economic data to report today.  Stocks are taking a bit of a breather today, after a long weekend, and the continuous build-up on stocks.  The IMF reported that they revised their 2020 world economic outlook, which was revised lower by 0.1%, including the US.  President Trump touted the strong economy in the US at the World Economic Forum in Davos, Switzerland.  Asian Markets have been negatively affected over the concerns of a possible outbreak of a serious virus.  The Q4 Corporate Earnings continue to be reported.  Nothing major to report.  It's been more like "Goldilocks" effect -Not too hot, nor not too cold.  MBS is currently Up 9bps, so this improvement and coupled with the late improvement on Friday, should have Mortgage Rates in a slightly better pricing picture today.  Yields have fallen and are testing it's Fibonacci level again.  It's sitting around 1.78% currently.

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Daily Market Report 1/17/20

http://MikesDailyMarketReport.com: Housing Starts rose by 17% MoM to 1.608 million annualized units, which is the highest in 14 years.  However, Building Permits dipped 3.9% to 1.416 millin annualized units in December.  Industrial Production dropped by 0.3% in December.  Capacity Utilization dropped from 77.4% to 77.0% in December.  The Jolts Jobs Report (Job Openings) dropped from 7.361 million in Octobre to 6.8 million in November.  Consumer Sentiment dropped from 99.3 to 99.1 in January.  Stocks are Up this morning on the Housing Starts data and the Q4 Corporate Earnings, which has for the most part, been above forecasts.  China unveiled that they grew at 6.1% last year, which is the worst growth rate in 30 years.  This can be contributed to the detente with tthe US in trade. However, it's MoM in December dramatically increased, as trade picks up with the recent Phase One signing.  MBS is currently down 8bps, off from earlier lows, which touched off it's Fibonacci floor of support.  Mortgage Rates worsened a little bit today, as a result.  Yields are fighting their way back above it's 50 DMA and sitting near 1.84%.

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Daily Market Report 1/16/20

http://MikesDailyMarketReport.com: Weekly Jobless Claims dipped a bit further (Good News!) to 204k.  Retail Sales rose 0.3% in December; however, if you exclude Autos, then it rose 0.7%.  Manufacturing is showing some improvement in January, as the Philly Fed rose to 17.5 (on the heels of Empire State Index higher levels).  The Import Price Index rose 0.3% in December.  Business Inventories dropped 0.2% in November.  The NAHB Home Builders Index dropped slightly in January, going from 76 to 75.  Stocks are trading in Positive Territory this morning after the Phase One Deal was signed yesterday.  The Q4 Corporate Earnings continue to come out.  MBS is currently Down 3bps, so Mortgage Rates remain Unchanged from yesterday.  Yields have touched the important Fibonacci Level (1.779%) again today, but has since bounced a little higher to 1.81%.  This Fibonacci line is putting a cap on Mortgage Rates; so, if it can break below this line (and remain below it), then there's a good chance of Mortgage Rates improving further.  But this has been a strong support for Yields since early December.

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Daily Market Report 1/15/20

http://MikesDailyMarketReport.com: The Wholesale Inflation data was reported today, as the Producer Price Index rose only 0.1% in December, but it's YoY rose from 1.1% to 1.3%.  The Core PPI also rose 0.1% in December, however, it's YoY dropped from 1.3% to 1.1%.  Manufacturing improved around the NY region in January, as the Empire State Index rose from 3.3 in December to 4.8 in January.  Later today, the Fed Beige Book will be released, as it will provide more of a Micro Economic view of the US economy.  Stocks continue to rise, as we've approached the signing day for Phase One, which will be done later today.  Also, we're at the beginning of the Q4 Corporate Earnings Report season, which it's been ok, rather mixed.  MBS is Up 2bps so far this morning, so Mortgage Rates remain Unchanged.  They may have a difficult time rising, as the Yields are fighting to remain above the important Fibonacci level at 1.779, which is keeping a lid on the MBS from improving much more.  Yields are currently around 1.79 (and did touch off the Fibonacci earlier).

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Daily Market Report 1/14/20

http://MikesDailyMarketReport.com: The NFIB Small Business Index dropped 2 points to 102.7 in December.  On the inflation front, we have the Consumer Price Index, which rose only 0.2% in December, below it's 0.3% forecasts; and it's YoY rose from 2.1% to 2.3%.  The Core CPI rose 0.1% in December and it's YoY remained Unchanged at 2.3%.  Stocks are trading rather lightly this morning, as we begin the Q4 Corporate Earnings Reports.  Today's releases were Mixed, as are the Indexes.  MBS is Up 5bps, so Mortgage Rates remain Unchanged from yesterday's pricing.  Yields have slid below the 50 DMA and sit around 1.82%.

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Daily Market Report 1/13/20

http://MikesDailyMarketReport.com: There are no economic data to report this morning, as it's a relatively quiet news day.  Stocks are Up this morning on anticipation of the US and China Phase One Trade Agreement due to be signed this week, most likely on Wednesday.  MBS is currently Down 8bps and are facing a possible Negative Stochastic Crossover, which could halt it's currently upward trend.  Mortgage Rates at the moment remain Unchanged.  Currently, Yields have climbed their way above the 50 DMA and sit around 1.85%.

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Daily Market Report 1/10/20

http://MikesDailyMarketReport.com: Non-Farm Payrolls disappointed with 145k jobs in December based on 156k forecasts.  November and October numbers were revised lower by 14k.  However, the Unemployment Rate remains Unchanged at 3.5%.  Average Hourly Earnings also disappointed, as it only rose 0.1%, as forecasts called for 0.3%.  We'll watch these numbers, as it appears that we're seeing Weekly Earnings decreasing, which may be an indicator that Businesses may be cutting back on hours and employment income in order to avoid job cuts.  Stocks are currently trading in light trade in Positive Territory.  The delegate from China is expected to arrive on Monday for the Phase One signing.  MBS rebounded nicely late yesterday and that momentum is carrying on this morning, as MBS is Up 5bps.  Mortgage Rates have improved from yesterday mornings pricing.  Yields are now at 1.83%.

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Daily Market Report 1/9/20

http://MikesDailyMarketReport.com: The Weekly Jobless Report continues to show strong labor market, as only 214k people applied for benefits last week.  Stocks are Up this morning, as tensions in the Middle East seem to calm down; and China announced they'll be in Washington DC to sign the Phase One Agreement.  MBS took a hit yesterday afternoon, as Lenders re-priced for the worst.  It broke below it's floor of support (fibonacci) and today it fell further and tested the next floor at 100 DMA.  Currently, it's down 3bps (off from lows).  Pricing is worse than yesterday morning's pricing, but similar to yesterday's close.  Yields have climbed again, up to the 1.87% to 1.88% range.

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Daily Market Report 1/8/20

http://MikesDailyMarketReport.com: The ADP report on new jobs came in hot!  The November numbers were revised higher.  The initial data for November was 67k and revised higher by 57k to 124k.  In December, it rose to 202k; so, very nice numbers!  We'll get to view the BLS' numbers on Friday, which will be the Big One!  Stocks started the morning Way Down, after Missle Strikes by Iran on US Military bases in Iraq.  They rebounded into Positive Territory, after the Iranian Foreign Minister stated that concluded their intentions and do not wish to escalate further.  President Trump tweeted shortly after that damages were minor and so far no casualties have been reported; and he'll give an address at 11am PST this morning.  However, the DOW is being weighted down a bit this morning by Boeing (it carries a lot of weight on the index) because of a tragic Ukrainianan airline crash (on a Boeing 737, not the MAX) in Tehran,just after takeoff (killing all those onboard).  MBS is currently Down 5bps, so Mortgage Rates remain Unchanged from yesterday.  We may have topped out, so be a bit cautious, if you are in a transaction and floating any rates.  Yields started much lower this morning, but rebounded Up to 1.82%.

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Daily Market Report 1/7/20

http://MikesDailyMarketReport.com:  The ISM Non-Manufacturing Index, which is the "Gold Standard" index in it's reports of the health of the Services Industry, rose from 53. 9% in November to 55.0% in December.  This followed the same trend as yesterday's Markit Services PMI data, but a greater jump upwards.  Factory orders dropped 0.7% in November.  Stocks started the morning in Mixed territory, as it struggled yesterday and closed in Positive territory, but it currently went into Negative mode, as concerns outweigh everything else over the Middle East tensions.  Investors are deciding where to place their money.  MBS is currently down 3bps, but Mortgage Rates remain Unchanged from yesterday's pricing (same as Friday's pricing too).  Yields have climbed upward to 1.81% o 1.82%.

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Daily Market Report 1/6/20

http://MikesDailyMarketReport.com: Markit Services PMI rose from 52.2 in November to 52.8 in December.  Stocks started the Morning in the Red, as Investors continued their concerns over the Drone Strikes in Iraq last week; however, the sentiment softened, and Stocks closed in Positive Territory.  MBS is about to close and is currently Up 2bps.  Mortgage Rates remained Unchanged from Friday's pricing.  Yields are Up to 1.80%.

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Daily Market Report 1/3/20

http://MikesDailyMarketReport.com: ISM Manufacturing Index disappointed, as it dropped in December (going from 48.1% in November to 47.2% in December).  Analysts may begin to disregard this report in the near future, as Boeing intends to halt their 737 Max production in January.  Production by Boeing make up a very large component of the index, which will complicate the data being reported thereafter.  Construction Spending rose by 0.6% in November, exceeding expectations.  Later today, the FOMC Minutes will be released.  Typically, this could move Markets, but the last meeting was unanimous in their interest rate vote, so we don't anticipate any surprises.  Stocks are in the Red this morning on news that tensions are heightening between the US and Iran, as the US sent in an Drone Strike to a Baghdad airport that killed the Iranian top military commander.  Iran stated they will revenge.  This is on the heels of back and forth attacks recently that have left casualties on both sides.  MBS is gaining on this news, as Investors go to "Flight to Safety" by pulling their investment money from "risky" equities to the safe haven of bonds.  MBS is Up 14bps, so Mortgage Rates improved a little bit today.  This Geo Political news may help to keep Bonds higher, which we'll keep watching.  Yields have slid down to 1.83%.

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Daily Market Report 1/2/20

http://MikesDailyMarketReport.com: The Weekly Jobs reported that 222k people applied for first time unemployment benefits last week.  The previous report was revised higher by 2k, to 224k.  The Markit Manufacturing PMI released their final number for December, which came in at 52.4.  This is higher than it's initial reading of 52.2, but lower than November's report at 52.6.  Stocks are Up this morning as we begin the New Year.  The only Market news is out of China, which the People's Bank of China lowered their reserve requirement on deposits for Commercial Banks, in order to stimulate it's economy.  They reduced it by 0.5%.  Also, like our Manufacturing data being reported today, their PMI came in lower than November's report, but still in expanding territory.  MBS is currently Up 17bps.  If they can maintain these levels, then there's potential improvement for rates, as there will be approximately another 40bps until next resistance level.  That will be approximately .125% to .250% improvement to Mortgage Rates, as they have improved a bit today.  Yields are falling, as they've reached just below the 1.86% level.

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