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July 12th Market Commentary

July 12th Market Commentary

MBS prices are up about 5/32 this morning while the DOW is up about 360 points as investors assessed earnings reports from big Wall Street banks and clung to rate-cut hopes. The market is almost fully pricing in a reduction in September, and bets are growing on a second cut in December, according to the CME FedWatch tool. Now the debate has shifted from whether the Fed will act to how often and how deep, with some on Wall Street calling for rates to drop by as much as 0.75% by the end of the year.

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July 11th Market Commentary

July 11th Market Commentary

MBS prices are up about 12/32 this morning while the DOW is up about 90 points as investors rotated out of tech following a key report showing consumer prices unexpectedly fell on a month-over-month basis for the first time since 2020. Tech heavyweights Nvidia, Microsoft and Meta all fell. Meanwhile investors flocked to rate sensitive sectors like Real Estate and Utilities, up about 2% and 1.5% respectively. The Consumer Price Index (CPI) for June declined 0.1% over the previous month and increased just 3.0% over the prior year. The annual gain was the slowest rise in consumer prices since early 2021.

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July 10th Market Commentary

July 10th Market Commentary

MBS prices are up about 2/32 this morning while the DOW is up about 400 points as Jerome Powell’s remarks on Capitol Hill buoyed rate-cut hopes and Big Tech stocks piled on the gains. In his semiannual testimony to Congress, Powell hinted the stage is almost set for lowering interest rates from two-decade highs, pointing to a cooling in inflation and in the jobs market. He also cautioned that keeping rates elevated for too long could weaken the economy, giving hope to rate-cut-hungry investors.

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July 9th Market Commentary

July 9th Market Commentary

MBS prices are down about 1/32 this morning while the DOW is up about 140 points as investors assessed concerns about a pullback while Federal Reserve chair Jerome Powell kicked off his semiannual update to Congress. Stocks have achieved fresh all-time highs as signs of a US economic slowdown bolster bets on interest-rate cuts. Powell shed light on the Fed’s picture of the economy, commencing his twice-yearly policy update to Congress on Tuesday with an appearance in the Senate. In prepared remarks, the central bank leader said he’s encouraged by evidence of cooler inflation, but that the Fed still needs more “good data” to be confident that inflation is moving towards its 2% target.

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July 8th Market Commentary

July 8th Market Commentary

MBS prices are up about 1/32 this morning while the DOW is down about 90 points ahead of a consequential week that could provide key signals for the near-term path of interest rates. The S&P and Nasdaq are looking to build on records secured in the wake of Friday’s jobs report, which signaled continued cooling in the labor market. That prompted an influx of bets on a September rate cut from the Federal Reserve. About 3 in 4 traders expect a cut in September, according to the CME FedWatch tool.

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