Friday, October 16, 2020

Daily Market Report 10/16/20 Retail Sales surprised investors, as it rose 1.9% in September on forecasts of 0.7%; even when you exclude Autos, it rose 1.4%.  This adds to the Consumer Sentiment, which rose from September's number at 80.4 to 81.2 in mid-October.  Capacity Utilization rose only by 0.1% to 71.5% in September; however, Industrial Production surprised the Markets with a drop of 0.6% on forecasts of an increase of 0.5%.  This is something that we'll need to watch, as it could indicate negative numbers for the economy.  Lastly, Business Inventories rose 0.3% in August.  Stocks are Up this morning on the Retail Sales and Consumer Sentiment reports.  The Q3 Corporate Earnings are still being released, but nothing of note to report.  Pfizer mentioned that they could potentially release a vaccine by end of November on an emergency basis, if needed, while cases around Europe and a few states in the US have increased.  Investors are still in hope of a Stimulus Package prior to next month's elections; which has the Democrats at $2.2 Trillion, Trump at $1.8 Trillion and Senate at $500 Billion.  Looks like an impasse to me!  MBS is currently Down 2bps, coupled with yesterday's late decline, may lead many Lenders to price more negatively today (most likely a difference of 0.125% in rate).  They broke below their 25- and 50 DMA.  Yields broke back above it's Technical level and sit just above it's 0.74%.

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