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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