June 1, 2020 - Market Update

Mortgage origination flows continued to be strong with day over day improving by ~13% to $9.24B vs $8.20B. Lenders surveyed last week reported rates slightly lower, with most posting rates 3% to 3.5%. Using 3.25% as the prevailing 30yr rate, the primary/secondary spread was 157bps on Friday, tightening from the week prior. Dealers reported the 2% and 2.5% coupons were the primary hedge coupons last week, with the 2.5% coupon remaining at approximately 50%.

The 10yr bond rallied at the close, the yield decreasing to .653%.

Elon Musk’s company was able to have another first, SpaceX’s Dragon delivered two astronauts to the International Space Station for NASA on Sunday. This was the first time a privately built and owned spacecraft carried astronauts to an orbiting lab.

U.S. equities closed mixed on Friday with the S&P 500 Index closing up by +14.58 points, ending at 3,044.31, the DIJA losing -17.53 points to 25,383.11, while the NASDAQ increased by 120.88 points, closing at 9,489.87.  Equities in Asia and Europe closed lower on Friday with the Nikkei 225 closing down -38.41, and FTSE 100 closing down -142.19.

While only 38% of eggs are consumed outside the home, in places like restaurants and schools, 54% of pork and beef are eaten in such places. That percentage rises to 59% for turkey and 60% for chicken. But it is 70% for seafood! Not surprisingly, seafood prices are plummeting. Shrimp and catfish are down 10%, lobster tail 20% and salmon 25%.