http://MikesDailyMarketReport.com: Manufacturing in the Philadelphia region dropped more than expected, as the Philly Fed Index reported 31.5 for it's May report. Initial Jobless Claims continue to decline, as 444k people applied for first time benefits last week; however, the Continued Claims did spike a bit last week (by approximately 100k) when it was trajecting lower each week. Lastly, the Leading Economic Indicator jumped up 1.6% in April. After 3 days of being in the Red, Stocks are reversing course and in Positive Territory today. Yesterday, Investors were reviewing the FOMC Notes and saw the words tapering, which they began to panic (in both stocks and MBS Markets), as they felt the Fed would begin to taper sooner than expected. However, today, they're reviewing the Minutes more thoroughly and realized they over-reacted to the statements. The Minutes basically state that if the economy continues to rapidly gain steam and hit the Fed's goals, then they can look to discuss tapering at future meetings. This is still a ways off! MBS had regained it's over-reaction yesterday, which closed Down 20bps; and now it's Up 19bps. We're back to the same level of pricing as we've been pretty much the entire week. So, Mortgage Rates are about the same as yesterday's pricing; and better than yesterday afternoon's reprice for the worse. Yields are testing it's 50 DMA floor and sitting at 1.63%.
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