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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   1.692%  
  Support   1.604%  
  Resistance   1.299%  
  FN 2.5% Coupon   103.23 (-0.31)  
  Wednesday, May 12, 2021

Stocks & Bonds Decline as Inflation Angst Escalates

The Market opened today's session with treasuries lower across all maturities. The 10-year Treasury yield is currently at 1.6772, 5.55 bps higher than prior closing of 1.6217.

US stocks continued their decline for a third day and bond yields climbed after inflation rose more than forecasted, adding to concerns regarding price pressures and global economy recovery. The Nasdaq 100 fell 1.5% for a third day in a row, reaching its lowest point since March. Similarly, the S&P 500 dropped 0.7%, also decreasing for a third day in row. European stocks rose 0.3%, lifted by optimism about economic re-openings and booming commodities. Debate over whether inflation will be persistent enough to force the Federal Reserve to tighten policy sooner than current guidance suggests  that abundant stimulus has powered a rally in global equities, raising concerns valuations had become expensive. Fed Vice Chairman Richard Clarida played down the significance of rising inflation, saying it was due largely to transitory forces. Copper and iron ore were on course for new records amid a broadening commodities boom. Oil was steady above $65 per barrel. Wednesday’s CPI report showed that consumer prices climbed in April by the most since 2009, topping forecasts and intensifying the already- heated debate about how long inflationary pressures will last. The consumer price index increased 0.80% from the prior month, reflecting gains in nearly every major category and a sign burgeoning demand is giving companies latitude to pass on higher costs. Bond market expectations for the pace of consumer price inflation over the next five years surged earlier this week to its highest level since 2006.

The curve has bear-steepened with the UST 10-Year yield up 5.55 bps.

This Week's Events
  05/11 NFIB Small Business Optimism 03:00 Apr 100.80 99.80 98.20 -  
  05/12 MBA Mortgage Applications 04:00 7 May - 2.10% -0.90% -  
  05/12 CPI MoM 05:30 Apr 0.20% 0.80% 0.60% -  
  05/12 CPI YoY 05:30 Apr 3.60% 4.20% 2.60% -  
  05/12 CPI Index NSA 05:30 Apr 265.600 267.054 264.877 -  
  05/12 CPI Core Index SA 05:30 Apr 271.922 273.700 271.214 -  
  05/13 Initial Jobless Claims 05:30 8 May 490k - 498k -  
  05/13 Continuing Claims 05:30 1 May 3650k - 3690k -  
  05/14 Import Price Index YoY 05:30 Apr 10.20% - 6.90% -  
  05/14 U. of Mich. Sentiment 07:00 May P 90.20 - 88.30 -
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  This information is provided solely for informational use and is not intended as an advice for trading or investment purposes in any manner whatsoever. Sun West Mortgage Company, Inc. is not a licensed or registered broker or dealer and cannot provide investment strategies or recommendations. This information is provided to licensed brokers/lenders only and may not be copied or distributed to customers or potential customers. All loans are subject to approval. Certain restrictions may apply. Listed pricing is a morning indication only. Program rates, prices, guidelines, fees, costs, terms and conditions are subject to change without notice.  
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