MBS prices are up about 9/32 this morning while the DOW is down about 280 points as investors assessed a new batch of economic data. Meanwhile, reports that Iran is preparing a potential missile strike against Israel pushed bond yields lower and boosted the price of crude oil. Today’s economic reports showed that the September ISM Manufacturing Index checked in at 47.2% (Briefing.com consensus 47.7%), unchanged from August. The dividing line between expansion and contraction is 50.0%, so the September reading suggests the pace of contraction in the manufacturing sector was the same as the prior month. This was the sixth straight month (and 22nd out of 23) that economic activity in the manufacturing sector contracted. The key takeaway from the report is that it has reinforced the understanding that conditions in the U.S. manufacturing sector are weak, reflected further in the weakening employment index.

MBS prices are down about 6/32 this morning while the DOW is down about 200 points as investors waited to hear Federal Reserve Chair Jerome Powell speak in the run-up to the crucial monthly jobs report. Investors are now bracing for the September jobs report, due out on Friday, which is seen as posing an important test for the recent rally. The pressing question is just how quickly the labor market is slowing as the market weighs whether the Fed has acted aggressively to protect a healthy economy or to help a flailing one. Fed Chair Powell’s comments on the outlook for the economy this afternoon could help settle that debate.

MBS prices are up about 6/32 this morning while the DOW is up about 200 points as investors embraced an inflation report seen as crucial to the Federal Reserve’s next decision on interest rate cuts The August reading of the Personal Consumption Expenditures (PCE) index, the inflation metric favored by the Fed, showed continued cooling in price pressures. The “core” PCE index, which is most closely watched by policymakers, rose 0.1% month over month, lower than Wall Street forecasts.

MBS prices are down about 2/32 this morning while the DOW is up about 180 points as investors welcomed a slew of updates, including solid US economic data, Micron’s upbeat earnings, and China’s pledges of more stimulus, while they waited to hear from Jerome Powell. Helping the upbeat mood were growing expectations for another jumbo interest rate cut from the Federal Reserve. Traders are pricing in 60% odds of a 0.5% move at its November meeting, versus 40% a week ago. Investors are waiting for Fed Chair Powell’s statement later to test those hopes, the highlight in a parade of Fed speakers this morning. Their comments will set the stage for Friday’s highly anticipated reading on the PCE index, the inflation metric preferred by the Fed.

MBS prices are down about 7/32 this morning while the DOW is down about 270 points as investors look to new data for clues to the health of the economy and the chances of another jumbo rate cut. The question now becomes whether or not the US economy could find itself in a recession, with concerns fanned by a surprisingly weak reading on consumer confidence yesterday. The debate centers on whether the Federal Reserve lowered rates by a bigger-than-usual 0.5% in response to a slowing economy and what further malaise means for another hoped-for deep cut. Today’s lone economic report showed that sales of new single-family houses in the United States fell by 4.7% from the previous month to a seasonally adjusted annualized rate of 716,000. Mortgage applications however soared by 11% from the previous week in the period ending September 20th, extending the surge of 14.2% in the previous week, to lift mortgage application volumes to their highest since June 2022.