Thursday – September 26, 2024

Mortgage Backed Securities were down 13 bps on the open.   S&P stock futures are up 45 points.

Bonds were moderately stronger overnight, but all of the gains have left the building after jobless claims continue operating in territory that suggests a lack of labor market concern.

Jobless Claims = 218k vs 225k f’cast,     [219k prev]

Durable Goods = 0.0 vs -2.6 f’cast,      [9.8 prev]

Core Durable Goods = 0.2 vs 0.0 f’cast,    [-0.2 prev]

GDP (Q2, revision) = 3.0 vs 3.0 prev

The Atlanta Fed GDP Now estimate for the third quarter is currently 2.9%, which is well above the consensus of private sector economists.

New Home Sales came in at 716k last month, which was a touch above expectations. This was a 4.7% drop from July, but a 9.8% increase from a year ago. The median new home price fell about 4% to $420k while the average price fell about 8% to $493k.

New Home Sales continue to grind higher, although we are barely keeping up with the average pace over the past 25 years, while the population keeps increasing.

The bond market is still searching for its identity in the wake of last week’s Fed announcement.  Monday and Tuesday saw relatively big volatility in the morning with calmer, stronger afternoons–something that fueled hopes that the post-Fed correction was over.  Wednesday saw overnight losses with more weakness throughout the day, thus suggesting the post-Fed correction could still be alive. Thursday had a bit of everything: gains overnight, early losses and a decent afternoon recovery.  The only constant has been the ability of relevant econ data to set the trading tone.

UMBS closed down 4 bps at 101.19