Chuck Cowan’s Post

Bond pricing is worse as treasury yields inch higher in early trading. The U.S. 10 Year Treasury yield is currently 4.441%, above the open at 4.414%. The beginning of this week is filled with Fed official speaking engagements and very little economic releases. Existing home sales releases Wednesday at 10am ET along with the latest round of Fed Minutes from the May FOMC meeting. Investors remain hopeful for additional clues from the Fed minutes about the timing and frequency of rate cuts, however the Fed has continued on it’s path of reviewing economic data to show that inflation has eased to prescribed levels. The Fed’s stance will likely be echoed by Fed officials today and tomorrow at various speaking engagements. Initial jobless claims and new home sales will release Thursday with durable goods and consumer sentiment Friday. Mortgage applications moved 0.5% higher per the latest MBA reading for the week ended May 10th. Consumers are still struggling in a high rate and price environment with limited inventory. Mortgage rates are under slight upward pressure this morning all else constant.

Bond pricing and treasury yields were relatively flat in early trading. The U.S. 10 Year Treasury yield is currently 4.254%, slightly lower than the open at 4.266%. PCE inflation data showed a 0.4% increase month over month as expected and 2.8% increase year over year. Core PCE showed an increase of 2.8%. Initial jobless claims printed higher than expected at 215k vs 210k forecast. Pending home sales is due out at 10am ET followed by several Fed speaking engagements. Overall, the market seems to have initially shrugged off this morning's data overall with treasury yields holding relatively steady. Mortgage rates are likely to print flat to slightly worse all else constant.

Market Commentary 6.24.24- Bond pricing and treasury yields are relatively flat in early trading to start off the week. The U.S. 10-year Treasury yield is currently 4.275%, just above the open at 4.257%. Today and Tomorrow are filled with Fed speaking engagements as market participants continue to look to economic releases for guidance. Key releases this week will be a GDP revision with the latest initial jobless claims Thursday followed by a fresh round of PCE data to be released Friday. We will also see data on house prices with S & P Case Shiller due out Tomorrow as well as new home sales and consumer confidence later this week. Traders are pricing in roughly a 66% chance of a September rate cut, however, the Fed continues to hold steady, waiting for multiple data points around inflation and jobs data before considering a shift in policy. There’s still one rate cut forecasted by the Fed, but they could hold out till year end before using it. Below as a look at S&P Case Shiller ahead of Tomorrow's release. Home prices have been on a steady incline since July of last year as rates have increased and inventory remains relatively low. This continues to weigh on affordability for most home buyers. Mortgage rates are under slight upward pressure this morning as treasury yields hover above recent lows.

Bond pricing is improved this morning as treasury yields inch lower. The U.S. 10 Year Treasury yield is currently 4.134%, down from the open at 4.184%. Lots of early economic releases this morning, however the market remains relatively unchanged. Initial jobless claims blew through forecast coming in at 214,000 vs expectation of 200,0000. Continuing claims also notched slightly higher to 1.83 million. Durable goods orders missed the mark, showing 0% vs forecast of 1.1%. GDP showed growth in Q4 at 3.3% year over year vs. forecast of 2.0%. The Q4 GDP Price Index was 1.5% year over year vs expectation of 2.3%. Overall GDP was fairly strong, while Initial claims and Durable goods came in weaker than expected. New home sales will be released at 10am ET and investors continue to wait for Tomorrow’s PCE print to see how inflation is fairing. Mortgage rates will likely print flat to slightly better all else constant.

Market Commentary 6/26/24- Bond pricing and treasury yields remain flat in early trading. The U.S. 10 Year Treasury yield is currently 4.286%, just above the open at 4.244%. Fed Governor Bowman made comments Yesterday that the central bank was not ready to cut rates until the Fed sees sustainable movement with inflation toward its’ 2% Fed funds target. Bowman even stated that should inflation stall or reverse, raising rates was still a viable option. Fed Governor Lisa Cook also spoke stating that she only expects small change in inflation this year but sees inflation “slowing more sharply” next year. Market participants are still hopeful that economic conditions could point to rate cuts sooner rather than later. New home sales will release at 10am ET this morning and is the only release for Today. Investors are looking ahead to Tomorrow’s GDP revision, initial jobless claims and durable goods orders releases along with Pending home sales. Friday will wrap up the week with a fresh round of PCE data. The latest MBA application data shows a rise in applications for the week ended June 21st of 0.8%. Application demand rose sharply the first week of June as rates improved. Mortgage rates will likely print flat to slightly higher this morning all else constant.

Bond pricing is worse this morning as treasury yields inch higher. The U.S. 10 Year Treasury yield is currently 4.447%, up from the open at 4.414%. Yesterday’s lineup of Fed officials pleased for patience with rate cuts as inflation remains above the Fed’s 2% target. Even though signs are present that the economy appears to be edging closer to expectation, many are looking for additional weakening in the jobs market or several months of good inflation data before easing monetary policy. Investors are looking to the latest round of FOMC minutes to be released Today at 2pm ET. Existing home sales is also due out this morning at 10am ET. Tomorrow will bring initial jobless claims, S&P service and manufacturing PMIs and New home sales. Mortgage rates are under slight upward pressure this morning all else constant.

Bond pricing continues to improve as treasury yields creep lower. The U.S. 10 Year Treasury yield is currently 3.84%, down from the open at 3.864%. Consumer confidence came in stronger than expected Yesterday followed by stronger existing home sales data. Initial jobless claims released this morning showed 205,000 vs 215,000 forecast. New claims remain near lows while continuing claims remain at 2-year highs. GDP was revised downward for Q3 from 5.2% to 4.9%. Personal consumption was also revised lower from 3.6% to 3.1%. The most astonishing revision, however, was core PCE which was revised from 2.3% to 2.0% for Q3. This aligns with the Fed’s target rate and justifies the Fed’s pause and shift in what many hope will be a soft landing. The market quickly shrugged off the data releases as investors now look to PCE as the week winds down ahead of Christmas. Mortgage rates will likely see slight improvement this morning all else constant.

Bond pricing is relatively flat this morning as treasury yields inch lower. The U.S. 10 Year Treasury yield is currently 4.41%, down from the open at 4.439%. Market sentiment seems to be building that the Fed's rate hiking campaign could be over. The latest round of inflation and jobs data suggests that the economy could be weakening as the Fed hones in on its typically 2% inflation target. All are hoping for a soft landing from here. Housing starts data released this morning saw an increase of 1.9% month over month as building permits also saw slight improvement. Housing has suffered with higher rates and prices coupled with limited inventory as homeowners cling to lower rate mortgages. As the tide turns and rates potentially improve, affordability could gradually come back in play allowing for a shift in the housing space. Mortgage rates are likely to print flat to slightly better this morning all else constant.

All eyes were on the Fed meeting this week, and the outcome was mostly as expected. The Fed made no change in the federal funds rate, which was good news for investors, and mortgage rates ended the week a little lower. Officials also raised their projections for GDP growth, reflecting the solid performance of the economy in recent months. Investors were primarily focused on the future path that officials anticipate for rates, and their median forecast remains for three 25 basis point rate cuts this year. Of note, the spread between officials grew narrower, meaning that there was less deviation in the higher and the lower individual forecasts from the median. In short, they are now more closely aligned with the consensus outlook. The big question remains whether the uptick in inflation in January and February was mostly due to temporary seasonal quirks or whether it indicates that the downward trend has stalled. Fed Chair Powell suggested that inflation likely remains on a gradual downward path to the target rate of 2.0% annually in his press conference following the meeting. Investors anticipate that the first rate cut will take place in June or July, depending on the inflation data in the coming months. Stay tuned for updates on this important topic.

Bond pricing is slightly worse this morning as treasury yields inch higher ahead of Today’s early market closure. The U.S. 10 Year Treasury yield is currently 4.22%, up from the open at 4.206%. Initial jobless claims were 210,000 for the week ending 3/23, moving 2,000 lower from last week. Continuing claims are 1.819 million, showing an increase of 24,000. GDP was revised upward from a 3.2% to a 3.4% annualized rate. The update reflected upward revisions to consumer spending and nonresidential investment. Pending home sales and consumer sentiment are due out at 10am ET to finish off a short trading week as the markets close early Today and are closed Tomorrow. Investors will still be watching closely as PCE data releases Tomorrow, and the aftereffects potentially hit the market Monday of next week. Mortgage rates will likely print flat to slightly higher this morning with market closure looming and uncertainty around Tomorrow’s PCE numbers.