June 11, 2020 - Market Update

Mortgage origination volume came in at $8.14B, slightly higher than the five-day average of $8.05B.

In yesterday’s Federal Reserve MBS Purchase Operations, the Fed purchased, $1.1B G2SF 2.5%, and $400M G2SF 3.0%.  In Agency 30-year, the Fed purchased $766M FNCL 2.0%, $1.73B FNCL 2.5% and $474M FNCL 3.0%.  Federal Reserve MBS purchase operations scheduled for today include 15-year Uniform MBS 2.0% and 2.5%, totaling $1.575B, and 30-year Uniform MBS 2.0-3.0%, totaling $2.97B.

US treasuries legged higher for the third straight day, moving up in price by +30/32nds and lower in yield, with the 10-year benchmark closing at 0.73%, as Fed Chairman Powell’s statement that, “we’re not even thinking about raising rates,” reverberated throughout the markets.  

US equity markets took investors for a ride yesterday, fueled by profit taking after weeks of rapid gains, and by comments in the afternoon from the Chair of the Federal Reserve.  The market vacillated between positive and negative territory most of the day, before news of an emerging second wave of COVID-19 “hot spots” in states that reopened, and Chairman Powell’s statement the Fed would keep rates at zero through 2022 to combat potentially long-lasting damage inflicted on the economy by the virus, drove most equities lower.  The Nasdaq Composite Index bucked the trend, making history for the second straight day, this time closing above the mythical 10,000 mark at 10020.35 (up +66.59 points) after briefly passing it on Tuesday. The Dow Jones Industrial Average Index closed lower after a roller coaster session, down -282.31 points (down 1.04%) at 26989.99, while the S&P 500 Index fell -17.03 points (-0.53%) at 3190.04. 

Hotel occupancy is up for the seventh straight week, albeit from a staggeringly depressed level. For the week ending 5/30/20, US hotels enjoyed (if you can call it that) an occupancy rate of 36.6%, pushing weekly demand to about 11 million room nights. The average daily rate per occupied room was $82.94, down 33.3% Y-o-Y. The average rate per room (occupied or vacant) was just $30.34, down (gulp) 62.1% Y-o-Y.

Marks @ 7:30am
2 Year
0.177%
10 Year
0.698%
FN30 2.5%
104-01+
FN15 2.0%
103-20

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