Market Update, Friday, June 5, 2020
Mortgage origination flows were slightly down, roughly 4% day over day at $8.07bln vs $8.42bln. U.S. equities closed mixed on Thursday with the S&P 500 Index lower by -10.52 points ending at 3,112.35, the DIJA up +11.93 points to 26,281.82, while the NASDAQ lost -67.10 points closing at 9,615.81. May Nonfarm Payrolls, expected to fall 7.5 million, only lost 2.5 million jobs.
Market Update, Thursday, June 4, 2020
Mortgage origination flows were slightly down, roughly 5% day over day at $8.42B vs $8.84B. U.S. equities closed higher with the S&P 500 Index closing up by +42.05 points ending at 3,122.87, the DIJA gaining +527.24 points closing at 26,269.89, while the NASDAQ increased by +74.54 points closing at 9,682.91. Stocks opened mixed as new unemployment claims reported fell to 1.88 million indicating a reduction in job losses. Investors for the most part are still looking past a week a civil unrest and tensions with China and will focus on the US labor report on Friday.
Market Update, Wednesday, June 3, 2020
Mortgage origination flows resumed expected levels day over day, improving by ~19% at $8.84B vs $7.43B. The MBA Mortgage Application Index was released earlier this morning and showed a decrease of 3.9% for the week ended May 29 after rising 2.7% in the prior week. Purchase applications were up 5.3% after rising 8.6% in the prior week. Refi applications fell 8.6% after falling .02% in the prior week. The avg 30yr fixed rate is now 3.37%. FHA purchases were up by 5.6% & VA refis were down by 12.1%.
Market Update, Tuesday, June 2, 2020
Mortgage origination flows were 23% below the 5 day average at $5.69B vs $7.43B. The Fed reinvestment operation reached the maximum purchase amount yesterday and is cleared to purchase up to $1.57B in 15yr and $2.97B in 30yr UMBS securities today
Market Update, Monday, June 1, 2020
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%.
Market Update, Friday, May 29, 2020
Treasury supply and record mortgage originations continue to put pressure on bond prices. FedTrade purchases continue to buy an average of $4.5B per day. Mortgage originations remain strong with dealers reporting $7-8B per day on average. More than 25% of 30y origination flows are in UMBS 2.0’s. The FedTrade will buy up to a maximum of ~$4.77B in current coupon FNCL and G2SF securities.
Orphaned Non-QM Loans Moving with Securitizations Back, article by Debtwire
The revival of non-QM securitizations is helping to start a chain reaction of whole loan sales and the return of more originators.Recent deals from Angel Oak, Invictus Capital Partners, and Starwood Property Trust showed that investors are backing off the worst-case scenarios for the non-agency loans as the nation struggles with the COVID-19 pandemic, said two investors.
Market Update, Thursday, May 28, 2020
The 10 year treasury reached a 0.73% yield in early trading yesterday before rallying back to close roughly unchanged at 0.68%.
Market Update, Wednesday, May 27, 2020
What difference a day makes. Investors shrugged off concerns with US/China relations, poor economic data and sub par earnings to focus on buying equities. Germany announced plans to lift travel restrictions, Japan is ending the state of emergency and optimism in the US had investors scrambling to buy particularly in sectors hardest hit by the pandemic. The Dow and S&P rallied by +2.2% (+529.95) and +1.2% (+36.32) respectively. Renewed investor optimism in an economic recovery appear to be driven by easing of restrictions and ongoing stimulus from major economies. Markets will however watch for new developments in Hong Kong and a U.S. reaction to the new national security laws in China as well and any vaccine related developments.
Market Update, Tuesday, May 26, 2020
Throughout last week, production coupons managed to trade higher by +8/32nds. The Dow was lower w-o-w by -132 points (-0.54%) but the S&P was slightly higher by +7 points (+0.05%). Origination volume remained healthy to close out the week with dealers reporting $5.75B to $7.6B in flows.
