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Market Commentary

Market Commentary

Today's Coupons
  10-Year Notes   99-18.5 (-024)  
  FN 2.5% Coupon   104-22 (-05)  
  Support   0.787%  
  Resistance   0.614%  
  Tuesday, December 01, 2020

Treasury Yields Rise as The S&P Sets a New Record High

Market opened today's session with treasuries lower across all maturities. 10-Year Treasury yield is at 0.9194, 8.05 bps increased from prior closing of 0.8389.
US stocks opened higher this morning as the S&P 500 recorded a new record high. Vaccine optimism continues to be a core driver behind the market, with Pfizer & BioNTech SE seeking clearance in the EU, aiming for approval before year-end. Notably, Federal Reserve Chair Jerome Powell will be testifying before congress Tuesday and Wednesday, with no indication as of yet on how the central bank will proceed as the economy remains in a weakened state. Elsewhere, Bitcoin retracted from $20,000, all the while WTI crude dropped by 0.7% as OPEC+ signalled more time would be needed to reach a deal. Gold rose by 1.80% to $1,809.25 an ounce. On the economic front, Markit US Manufacturing PMI reported in line with expectations of 56.70 as new orders and output rose at a faster pace than seen in October. ISM Manufacturing failed to meet expectations after reporting slightly lower at 57.50. With the value remaining above 50, signaling growth, the month of November showcased an expanding manufacturing sector, albeit at a slower pace than the month prior. Notably, the reported employment index fell by 4.80 points to 48.40, indicative of a weakened labor market. Elsewhere, Construction Spending rose by 1.30% for the month of October, exceeding expectations and outperforming the prior reported value of 0.30%. Government Construction spending accounted for 24.00% of total spending, with private construction and public construction rising by 1.40% and 1.00%, respectively. Reporting tomorrow are MBA Mortgage Applications and ADP Employment Change, with the latter expected at 430K.
The curve has bear-steepened with UST 10-Year yield up 8.05 bps.
This Week's Events
  11/30 Dallas Fed Manf. Activity 07:30 Nov 14.30 12.00 19.80 -  
  12/01 ISM Prices Paid 07:00 Nov 65.00 65.40 65.50 -  
  12/01 Construction Spending MoM 07:00 Oct 0.80% 1.30% 0.30% -0.50%  
  12/02 MBA Mortgage Applications 04:00 27 Nov - - 3.90% -  
  12/02 ADP Employment Change 05:15 Nov 430k - 365k -  
  12/03 Initial Jobless Claims 05:30 28 Nov 775k - 778k -  
  12/03 Continuing Claims 05:30 21 Nov 5800k - 6071k -  
  12/03 Bloomberg Consumer Comfort 06:45 29 Nov - - 49.60 -  
  12/03 Markit US Services PMI 06:45 Nov F 57.50 - 57.70 -  
  12/03 Markit US Composite PMI 06:45 Nov F - - 57.90 -  
  12/04 Change in Nonfarm Payrolls 05:30 Nov 486k - 638k -  
  12/04 Average Hourly Earnings MoM 05:30 Nov 0.10% - 0.10% -  
  12/04 Average Hourly Earnings YoY 05:30 Nov 4.20% - 4.50% -  
  12/04 Factory Orders 07:00 Oct 0.80% - 1.10% -  
  12/04 Durable Goods Orders 07:00 Oct F 1.30% - 1.30% -  
  12/04 Durables Ex Transportation 07:00 Oct F 1.30% - 1.30% -
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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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