WTMS Blog Today = What’s up in Mortgage Today (PM) – 11/04/2025

Stock trading dominated today’s market narrative as heavy selling in equities finally translated into modest gains for mortgage-backed securities. This classic flight-to-quality trade hasn’t been reliable lately, with stocks and bonds moving together since late May. However, today’s sharp tech selloff created enough selling pressure to push the 10-year Treasury down 2 basis points to 4.08%.

The artificial intelligence sector led the stock decline after Palantir’s earnings failed to impress investors despite beating estimates. With AI stocks trading at extreme valuations, even good news couldn’t prevent profit-taking in names like Tesla and Nvidia. Wall Street executives at a Hong Kong summit warned that markets could face a 10% pullback in the next 12-24 months.

Federal Reserve officials continued sending mixed signals about December’s rate decision, adding uncertainty to an already volatile environment. The government shutdown is hampering economic data releases, leaving traders to navigate with limited information. This data darkness is making market participants hesitant to take large positions in either direction.

Why have mortgage rates remained elevated despite last week’s Fed cut? Industry experts point to corporate bond issuance as tech giants sell Treasuries to fund AI infrastructure projects. Combined with fewer buyers and concerns about economic resilience, this supply pressure keeps yields elevated even after Federal Reserve easing.

Locking vs Floating

With rates at three-week highs entering November, risk-takers are watching for signs that the upward momentum has exhausted itself. Wednesday’s ISM Services data represents this week’s biggest potential market mover. MBS gained 2 ticks today while the 10-year fell 1.4 basis points, providing modest relief from recent pressure but not enough to change the cautious outlook.

Today’s Events

No major economic data due to government shutdown

Bond Pricing

UMBS 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.55 | 0.09 |
| 5.5 | 101.05 | 0.05 |
| 6.0 | 102.26 | 0.01 |

GNMA 30 yr
| Coupon | Price | Intra-Day Change |
| 5.0 | 99.72 | 0.08 |
| 5.5 | 100.84 | 0.04 |
| 6.0 | 101.75 | 0 |

Treasuries
| Term | Yield | Price | Intra-Day Yield Change |
| 2 yr | 3.574 | 99.859 | -0.031 |
| 3 yr | 3.581 | 99.771 | -0.031 |
| 5 yr | 3.692 | 99.699 | -0.029 |
| 7 yr | 3.875 | 100.001 | -0.03 |
| 10 yr | 4.083 | 101.358 | -0.024 |
| 30 yr | 4.666 | 101.347 | -0.021 |