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June 21st Market Commentary

June 21st Market Commentary

MBS prices are down about 1/32 this morning while the DOW is down about 15 points as a tech-led rally showed real signs of fatigue for the first time in over a week. Investors are also assessing the broader health of the US economy and the path for interest rates. Former St. Louis Fed president James Bullard, an inflation hawk, said Thursday that last week’s cool Consumer Price Index reading could pave the way for a rate cut in September. Around two-thirds of traders still expect rate cuts to begin then, according to the CME FedWatch tool. Bond yields are higher, with the 10-year Treasury yield at about 4.27%.

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June 20th Market Commentary

June 20th Market Commentary

MBS prices are down about 2/32 this morning while the DOW is up about 135 points as most traders continue to bet on a Fed cut by September, according to the CME FedWatch tool. The biggest piece of economic data came in the form of weekly jobless claims, which showed a dip of 5,000 to 238,000 last week versus a consensus expectation of 235,000, to mark the second-highest reading since August of 2023. The four-week moving average for initial claims, which reduces week-to-week volatility, increased by 5,500 to 232,750.

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June 18th Market Commentary

June 18th Market Commentary

MBS prices are up about 7/32 this morning while the DOW is up about 50 points as Nvidia surpassed Microsoft to become the most valuable public company. It wasn’t all positive news after May’s retail sales numbers disappointed. Government data released on Tuesday showed that retail sales increased just 0.1%, missing economist expectations, Yahoo Finance’s Josh Schafer reported. Meanwhile, April’s numbers were revised to show a decline. It could be a sign of more consumer strain amid high interest rates and persistently stubborn inflation.

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June 17th Market Commentary

June 17th Market Commentary

MBS prices are down about 3/32 this morning while the DOW is up about 90 points with last week’s double dose of inflation reports and the Federal Reserve meeting behind markets, fewer catalysts are set to greet investors this week. The highlight will be Tuesday’s retail sales report, which provides a glimpse into the health of the US consumer. Fed policymakers will likely pick up their chatter after last week’s decision. Minneapolis Fed president Neel Kashkari on Sunday hinted that a December rate cut could be the Fed’s only move this year. Investors are pricing in around a two-thirds chance that the central bank begins its cuts by September, according to the CME FedWatch tool.

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June 14th Market Commentary

June 14th Market Commentary

MBS prices are up about 1/32 this morning while the DOW is down about 85 points signaling a retreat from all-time highs as European turmoil rattled nerves. A surprise cooling in wholesale price pressures gave heart to investors betting on two interest rate cuts this year since the decline is likely to be reflected in the coming PCE inflation reading watched by the Federal Reserve. The University of Michigan consumer sentiment for the US fell for a third straight month to 65.6 in June 2024, the lowest since November, from 69.1 in May and well below forecasts of 72, preliminary estimates showed. European stocks are headed for their worst week since October. Investors are concerned about the fallout for markets if the far right makes political gains or even wins France’s snap election.

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