Bonds Almost Able to Break Even Thanks to Tech Turmoil Tech stocks embarked on a wild ride starting with earnings releases after the bell yesterday. While today's recap title mentions "breaking even," if we were to measure today's bond market movement versus yesterday's 3pm ET levels, 10yr yields are more than 5bps lower. In other words, those earnings releases created a big late-day rally yesterday and today became largely about trying to hold onto the gains. By mid-day, bonds were a bit weaker with 10yr yields approaching 4.96%. Around 1240pm, news broke regarding Anthropic being unlikely…
New home sales lost almost no ground in September, effectively reinforcing the healthy rebound seen in August's report. The Census Bureau's New Residential Construction report clocked sales at an annual pace of 676k, down only 0.6% month over month. As seen in the chart below, the broader trend has been sideways for nearly 3 years now. The number of new houses for sale slipped to 476,000 , down 1.0% from August and 2.3% from a year earlier. With inventory edging lower alongside sales, the implied supply eased to 8.4 months , compared with 8.5 months in August and 8.2 months last…
Home price appreciation picked up again in August (as reported this week), but the improvement was minimal. The FHFA House Price Index rose 0.3% from July to August, bringing annual appreciation to 2.4% . July's previously reported monthly gain was revised down from 0.3% to 0.2%. Regional results remained uneven, with annual appreciation ranging from 0.5% in the Mountain division to 4.4% in the East North Central division. Case-Shiller's national index rose 2.1% year over year, up from 1.9% in July. The 10-City Composite gained 3.6% , while the 20-City Composite rose 2.7% . Even with…
Mortgage applications finally rebounded as mortgage rates fell for a second straight week. The Mortgage Bankers Association (MBA) reported a 3.4% increase in total application volume for the week ending October 23. The average 30-year fixed mortgage rate declined to 7.37% from 7.41%, its lowest level in three weeks. Both purchase and refinance applications moved higher, but just barely, and well below levels from last year. The seasonally adjusted Purchase Index rose 4% for the week, and still 18% below year-ago levels . Refinances increased 3%, offering only a modest rebound from a market…
The rate market continues taking cues from turmoil in the tech sector. That resulted in the lowest rates in more than a month today as tech stocks slide to their lowest levels since July. The biggest shift for the underlying bond market (bonds dictate rates) came just before 1pm on reports that Anthropic's post IPO credit rating was not likely to be "investment grade." That matters because it means Anthropic would face higher borrowing costs. Given the company's key role in driving the AI buildout, there are two implications that helped bonds/rates today. First, higher borrowing…
As companies around the nation stage in-person or virtual costume contests, here’s some information for you a little off the beaten path. People want to own a home (“no one grows up wanting to be a renter”) regardless of… the amount of daylight? Looking at averages in the Continental United States (not Alaska or Hawaii), the difference between the amount of daylight on the first day of summer and the first day of winter is 5 ½ hours, “cushioned” by adjusting our timepieces. As much of the nation prepares to “fall back” this Sunday, talk again has come up about Congress eliminating this…
Bonds were initially stronger in the overnight session with 10yr yields briefly falling under 4.90%. The rally generally aligned with overnight losses in the stock market, at least at first. When European markets came online, bonds began drifting more sideways even as stocks gradually declined to new lows. Given that today is month-end and that much of this month has seen quite a lot of volatility, it's reasonable to expect compulsory month-end trades to set the tone. Translation: bonds could do their own thing for their own reasons regardless of what's going on in stocks. Some analysts…
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…
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