MBS giving up much of yesterday’s gain right off the bat.  UMBS 6.0 is down 16 bps.  5.5 down 14.

Bonds were modestly weaker in the overnight session with half of the weakness in Asia and the other half in Europe.  All told, 10yr yields rose from 3.79 to just over 3.82 (i.e. “not much”).

Jobless Claims = 218k vs 210k f’cast,    [206k prev]

Continuing Claims = 1.875m  [1.865 prev]

Wholesale Inventories =  -0.2 vs -0.2 f’cast,  [-0.4 prev]

The U.S. trade balance came in at -90.27 billion vs -89.56 on the last print, creating an even larger deficit that will likely be a drag on Q4 growth.

Futures on the Nasdaq — already at a record and up 55% this year, the most since 1999 — rose 0.2%. S&P 500 contracts were little changed after the benchmark edged within 0.3% of its peak from two years ago.

Swaps markets are pricing in about an 84% chance of a cut by March, though traders will be watching weekly jobs data later Thursday for further clues on the outlook for rates.

While the equity bull market has been unstoppable, it looks unusual. 72% of equities in the S&P 500 have underperformed the index. This is the highest total since at least 2000. 2020 was the next worst year when slightly over 60% underperformed. Within the 11 sectors of the S&P 500, except for tech where 39.7% of firms underperformed, elsewhere the underperformance has ranged from 54.5% to 97.3%.

Fidelity Investments’ Q3 2023 analysis reveals a surge in hardship withdrawals and 401(k) loans, addressing short-term financial challenges. By the numbers: 3 percent took hardship withdrawals (up from 1.8 percent in 2022). 8 percent tapped into 401(k) loans (compared to 2.4 percent last year). The silver lining? Retirement balances are on the rise, and savings rates remain steadfast

Bonds failed to do anything remarkable on Thursday as the random strength seen in Wednesday’s session was mostly erased.  There wasn’t any obvious catalyst for moderate overnight losses, nor for the additional weakness leading up to the 7yr auction.  Perhaps traders were apprehensive about the auction considering the weak results.  At that point, we had our only logical correlation of the day (weak auction = higher yields), but nearly all of the volatility was contained inside yesterday’s trading range

UMBS 6.0 ended the day down 23 bps.   The 5.5 lost 23 as well.