Tech Jitters are Back. Bonds Like It As has been the case for the past several weeks, the near-term fate of the rate rally is dependent on tech jitters. While those had leveled off in a sideways pattern over the first few days of the week, they resurfaced today, both at the NYSE open and close. The 4pm move was bigger for stocks and directly linked to weak guidance in Intel and Amazon earnings releases. Bonds were already moderately stronger on the day after the 9:30am gains, but improved even more after the 4pm NYSE close. Econ Data / Events Core PCE (m/m) (Sep) 0.3% vs 0.3% f'cast,…
After 4 rather uneventful trading days, the bond market (which underlies interest rate movement) experienced a bit more volatility today. Fortunately, it was volatility in a friendly direction. 10yr Treasury yields ended the day at their lowest level since September 22nd. Mortgage rates dropped to their lowest mark since September 23rd for the average lender. [thirtyyearmortgagerates] Bond gains coincided with moments of weakness in the stock market, primarily at the 9:30am NYSE open and the 4pm close. Weaker guidance from the likes of Intel and Amazon reinforced the recently cautious…
Artificial intelligence continues to capture the imagination of a wide range of companies, including lenders. “Why Underwriting Is the Right Problem for AI to Solve First,” is a topic on a recent Thought Leadership piece. It will be a topic on today’s The Big Picture with James Sais, the head of mortgage lending at Fifth Third Bank. You may be thinking about rolling AI out, but who’s in charge, you or it? In its IPO filing Monday, Anthropic (ANT) warned prospective investors that artificial intelligence systems could pose catastrophic risks as they operate with greater autonomy. "Concerns…
PCE inflation was almost perfectly in line with even the unrounded expectations. The monthly core number was 0.32 vs 0.34 (or .3 vs .3 on most econ calendars). Perhaps the modest miss helps explain the modest drop in yields at 8:30am. All in all though, it was a small enough response as to obviate any further consideration. Bonds experienced a much bigger move at the 9:30am NYSE open when multiple large tech companies saw their stocks plunge sharply (led by Alphabet aka Google). A few instances of new corporate bond issues have accounted for small bounces in yields (Microsoft and…
Minimal Impact From Fed Fed day has come and gone with minimal fanfare. Markets ultimately found reason to downgrade expectations for future rate hikes (likely due to Warsh's general "wait and see" comments during the press conference), but at the expense of a bit of weakness in the longer end of the yield curve. In other words, 2yr yields fell and 10yr yields rose. Neither were appreciably far from levels seen 2 days ago. Additionally, not all of the above should be attributed to the Fed. 10yr yields are actually ending the day lower compared to levels seen around noon (2 hours before…
Today's Fed announcement had no impact on mortgage rate movement, and minimal impact on intraday bond market volatility. Well before the Fed announcement, the bond market was already slightly weaker compared to yesterday's latest levels. As a result the average mortgage lender set rates just a hair higher. Despite the increase, 30yr fixed rates are only 0.05% above the low of 7.30% seen last week and only 0.02% above yesterday's mark of 7.33%. Recent upward pressure is a factor of improvement in investor sentiment surrounding the tech sector.
The Federal Open Market Committee approved the following statement for release by a 12 10 – 0 2 vote: The Committee decided to raise maintain the target range for the federal funds rate by 1/4 percentage point to at 3-3/4 to 4 percent, in support of the Federal Reserve's dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system. Economic activity is expanding at a solid strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital…
The other day I went to Costco, and for $5.99 bought a pumpkin pie the size of a hubcap. What inflation? Costco’s hot dog/soda combo or the rotisserie chicken are loss leaders, but actual gasoline, beef, lettuce, restaurant meals, goods from overseas, and other items’ price changes have kept inflation in the headlines and impacted mortgage rates. (Other headlines include Fannie Mae earning $4.2 billion in the 3rd quarter; more below.) What about water prices and availability… are they important to homeowners or potential buyers? What happens when you combine something like clean water with a…
Coreweave stock moved higher again overnight and Coreweave bond yields continued lower, with some issues now back to yields seen 2 weeks ago. Treasuries/MBS have been doing their best to hold sideways after last week's rally, but can only do so much when that rally was driven by factors that are visibly unwinding. As for today's Fed announcement, the focus will be on the press conference in case markets can glean any clues about how the Fed's anticipated rate hike path may or may not line up with market expectations (there is no dot plot today).
Boring, Sideways Day. Does Wednesday's Fed Announcement Even Matter? Neocloud concerns continued to experience a small correction/consolidation after last week's surge. Interest rates could have justified a bit of weakness as a result, but managed to hold fairly steady. Bond market indecision likely has more to do with that and less to do with any sort of Fed Day anticipation. Markets have almost fully priced in a "pause." Any Fed-induced volatility would thus be dependent on verbiage--either in the announcement itself or the 2:30pm ET press conference. This is one of those Fed meetings that…
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