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Listen Live
Saturday’s: 9AM 1590 AM/97.9 FM KVTA
Sunday’s: 7AM K-EARTH 101 FM
MBS OVERVIEW
4:00 EST – Our benchmark FNMA MBS 6.00 March Coupon is up +2 BPS with 60 minutes left to trade.
There were no economic events today
On Deck for Tomorrow: Consumer Price Index
10 year and MBSs today little changed awaiting tomorrow’s January consumer price index (CPI). Stock indexes had a decent day. There wasn’t any driving news today, the world focused on US inflation.
The economic outlook still up in the air, today Wells Fargo’s Chris Harvey, head of equity strategy, added his voice to the view that the bear market in stocks is over. He added his opinion to Ed Yardeni, in calling an end to 2022’s bear market. In a Bloomberg MLIV Pulse survey conducted at the end of January, roughly 70% of the respondents said the stock market has yet to hit the bottom after the S&P 500 sank 25% from peak to trough. Yardeni viewed the equity rally from October as the start of a new bull, Harvey is less sanguine. He’s sticking to his year-end target of 4,200 for the S&P 500, a level that’s only 2.7% above Friday’s close. Normally we wouldn’t mention it but not much else to say. Powell isn’t done raising rates and increasingly worried about how high he will have to go to quell inflation. Morgan Stanley strategists saying stocks are ripe for a sell-off. The uncertainty continues with key Wall Street firms divided.
Tomorrow Jan CPI m/m is expected to increase from +0.1% to +0.5% but year/year inflation lower both for the overall CPI and the core year/year at 5.5% down from 5.7%.
It is a risky bet to be short treasuries into CPI tomorrow, on blip and treasury rates will increase. Our technical analysis remains bearish although we would rather not take on risk.
