Dow Gained 181 Points, It Was The Ninth Consecutive Week Of Gains and the Longest Streak Since May 1995
Happy Monday! The 10-year Treasury yield closed on Friday around 2.674% versus a Thursday close around 2.65%. The Dow gained 181 points, it was the ninth consecutive week of gains and the longest streak since May 1995. MBS improved by 9 bps.
This morning the 10-year yield opened around 2.677% and continues to trend in a lower tranche with 2.70% serving as a ceiling during February. Since mid-December the yield has maintained a 2.62% to 2.80% range with 2.70% being a pivot point. The Dow is up over 150 points this morning after reports that the U.S. will delay additional tariffs on Chinese good.
There are a variety of Fed speakers this week in addition to Chairman Powell scheduled testimony with Congress. Last week the FOMC members continued to express some conflicting views on inflation target, employment target and management of the balance sheet. There will be some economic reports next week with most reports containing delayed December data. Some January reporting has been delayed so it will be March and April before true economic data can be analyzed based on current conditions.
TUESDAY: New Home Data (Dec); Case-Shiller Home Price (Dec); Consumer Confidence (Feb); New Home Sales delayed (Jan)
WEDNESDAY: Pending Home Sales (Jan); Factory orders (Dec); Durable Goods delayed (Jan)
THURSDAY; GDP 1st and 2nd estimates (Q4); Chicago PMI (Feb); three Fed speakers and Powell testimony
FRIDAY: Consumer Spending (Dec); Personal income (Dec and Jan); Core Inflation (Dec); ISM manufacturing (Feb); Consumer Sentiment (Feb); Consumer Spending delayed (Jan); Core Inflation delayed (Jan); Construction spending delayed (Jan); Powell testimony
The Modern Mortgage Loan Originator uses Mortgage Coach. Additional information and TCAs available within Mortgage Coach and RateWatch.
Cost of Waiting Analysis
-- Home Value annual increase 4% based on variety of reports including NAR, Case Shiller and MBA.
-- Mortgage rate environment flat for the next 1-3 months; worsening in points within 4-6 months; .25 bps worse in rate within 6-8 months; additional .25 bps worse in rate by end of 12 months.
Borrower discount points and Seller Concession in lieu of Price Reduction
-- Average sales price reduction is 3% - 5% versus asking price.
-- 30-year FRM relative price versus 10/1, 7/1 and 5/1 ARMs through 1 point in discount stack.
-- ARMs currently escalate more deeply at 2% discount by .125% to .25% in rate versus 30-year FRM
Have a great day!