Tech Tanks and Bonds Pick Up The Slack What began with focus on funding concerns for Coreweave (and, to a lesser degree, a very small handful of other companies) is spreading to bigger tech names today. Mix and match your favorite combo of disappointing earnings, underwhelming guidance, or cautionary tales from analysts. Any combo you choose adds up to massive losses in tech stocks. From there, several avenues lead back to bond buying. At the most superficial level, we can simply say it's a flight to safety. But thinking deeper, an ongoing AI capex slowdown has implications for econ data and…
Interest rates continue taking cues from the market rethinking the pace of AI-related growth/spending. Last week's focus was on Coreweave and a few other companies who saw their cost of financing rapidly increase--a sign that investors were starting to worry about future return of capital. One remedy for such worries is to shift money into the safest parts of the bond market such as US Treasuries and mortgage-backed bonds. As demand for those bonds increases, rates fall. Today was a sharper, broader continuation of the same theme. Disappointing earnings calls and guidance for several…
Lender and Broker Products, Services, and Software “Ready to get ahead of what’s next in mortgage technology? Join us for the client-exclusive Optimal Blue Summit 2027, taking place Feb. 1 – 3, 2027, at the JW Marriott Desert Ridge Resort & Spa in Scottsdale, Arizona, for hands-on training, insightful breakout sessions, product demonstrations, and conversations with mortgage and business leaders. Hear from special guest Troy Aikman, Mortgage Bankers Association President and CEO Bob Broeksmit, MBA Chief Economist Michael Fratantoni, Optimal Blue leaders, and more as they explore the…
Oil prices are up. Bond yields are down sharply. If this was early September, that wouldn't make sense. Bonds decoupled from the oil correlation on Fed week and then REALLY decoupled as stronger econ data was priced in, starting with that very weird S&P PMI reaction on Sept 23. Ever since then, yields have been fumbling around in the dark, trying to find a long-term ceiling. Then Coreweave concerns came to the forefront, slowly at first (October 8) and then swiftly last week. Once again today, Coreweave bond drama is directly linked to this morning's sharpest movement toward lower…
Ultimately Flat After Options-Driven Volatility Treasuries continued in the same sideways holding pattern seen over the past 4 trading sessions. This generally mirrors a holding pattern in certain tech companies' credit risk metrics. In short, bonds currently have nothing better to do than wait and see if tech is experiencing some kind of true inflection point or just a false alarm. Today was set to be especially boring as a result, but there was some afternoon volatility surrounding the options expiration cut-off (which affected both Treasuries and stocks). Even then, the net effect of that…
It was another ho-hum day for mortgage rates, which is more of the exception than the rule these days. But we're not complaining! The uneventful, sideways movement means rates are holding in line with the lowest levels in nearly a month. Today would have been slightly lower than yesterday had it not been for some mid-day weakness in the underlying bond market. While there were a few war-related headlines that coincided with the timing, the volatility is more attributable to esoteric trader positioning considerations in the Treasury options market.
Let’s see what’s in my electronic mailbag. “Rob, is it true that LOs can now join the MBA directly?” Yup. There’s MBA Homebase that provides loan officers with education, coaching, professional development, and a stronger voice in the mortgage industry. It is open to loan officers at every lender and across every origination channel, regardless of whether their company is an MBA member. “Rob, I watched President Trump talk about Montana being helped, financially, by Fannie and Freddie. Is that legal?” Hah, define “legal.” Montana has about 10,000 sales a year, $3 billion divided by 10,000 is…
We find ourselves in a bit of a lull in the bond market this week, and we don't object! Yields aren't screaming back up toward recent highs. Nor are they extending last week's swift rally. Both would cause problems for different reasons. Consolidating last week's rally in this narrow, sideways pattern is arguably the very best thing that could have happened this week. Whatever happens next is likely to be driven by a combination of the evolving narrative on tech sector concerns, econ data, and the Fed policy stance (which is really just a function of the econ data). In general, it is the tech…
Tech Concerns Keeping Bonds in The Game There was some oil price volatility today that looked like it might line up with some of the intraday volatility in the bond market. This may have actually been relevant between 10:10 and 10:30am as various rumors circulated regarding a draft deal. But the general trading range of Treasuries/MBS has been facilitated by the ongoing focus on potential credit concerns for a few key tech names. Coreweave is front and center with today's corporate bond volatility lining up very well with the AM Treasury volatility. Specifically, the height of Coreweave's…
Mortgage rates dropped 0.03% today on average leaving the top-tier 30yr fixed rate index at 7.40% vs 7.43% yesterday--the third lowest level in more than 3 weeks. As has been and continues to be the case, the lower rates seen since last Wednesday are primarily being driven by concerns about deleveraging and potential contagion in the AI sector. One of the most closely-watched bellwethers has been Coreweave where a sharp decline in stock prices and sharp increase in corporate bond yields has broadly mirrored recent moves in interest rates. Some of today's intraday volatility can also be viewed…
Headlines and excerpts are sourced from Mortgage News Daily. All rights remain with the original publisher.
