Market Snapshot December 6, 2017
Good Morning on the best day of the week Wednesday,
A few data points out today, mostly in line with expectations..
- ADP Employment Change for Nov: Actual 190K, Consensus 185K, Last 235K.
- Productivity for Q3: Actual 3.0%, Consensus 3.2%, Last 3.0%.
Yet bonds are having a pretty good day. Yesterday afternoon stocks started to slide, that continued overnight which gave bonds a boost. The markets, for the moment, have shifted focus from tax legislation headlines to U.S. Government shutdown concerns. A Republican plan over the debt ceiling to avoid a federal shutdown got dismantled last night by majority leaders sending markets into a risk-off mode. The U.S. continues to face a potential partial government shutdown if legislative leaders do not agree on a spending bill by December 8th (this Friday). The German 10-yr bund is down to .29% and pulling our 10-yr with it. The US 10-yr is at 2.33% today from a low of 2.31%. Mortgage bonds also doing well at +15bps but were up as much as +29 just a bit ago. The answer to the lock question today would have to be, if you see a rate/price that works, take advantage of it. There will be elevated volatility through the end of the week with the unemployment numbers tomorrow, Jobs report on Friday, budget deficit extension and the tax bills being reconciled. I would think there is more downside risk than upside potential.
Last, and we will see if gets any legs, Maxine Waters, D-Calif., who is the ranking member on the House Financial Services Committee introduced a bill now in congress entitled the Making FHA More Affordable Act.. The bill would repeal the life of loan requirement and reinstate the FHA’s previous policy of requiring borrowers to pay insurance premiums until the outstanding principal balance reaches 78% of the original home value. Like I said, we’ll see if it gets any legs as the Democrats haven’t had much pull of late.
Make today great!