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Thanksgiving Hours: Nations Direct is closed on Thursday and Friday, no new rates until Monday.
Stocks are down big to begin Tuesday’s exchange as the technology and energy sectors lead US indices lower. Every member of the FAANG cohort is now trading 20% below their 52-week highs as money managers indiscriminately ditch positions. The S&P500 is no longer positive on the year, trading 1.25% lower, and is currently changing hands at 2,638.18, 1.95% lower.
Treasuries are gaining in the AM, piggybacking off a precipitous decline in global equities. Investors are piling into traditional safe-haven assets as rising rates, a slowdown in global growth, and trade tensions steer allocations on the street. The US 10-YR Note is currently trading around a September low (yield) at 3.0446%, 0.0182 lower.
MBS Performance and Volumes
MBS badly trailed Treasuries by the close of trading on Monday. In a volatile session that left the 10-year’s yield unchanged, 30-year Fannies and Ginnie IIs lagged the 10-year by 4-5 ticks, duration-adjusted, while 15-year Fannies trailed the 5-year note by 3-4 ticks. Trading was relatively light, with $125.4 billion in total activity and under $6 billion in specified pools.
TBA MBS’ are little changed in the AM despite a voracious selloff in global equities. Housing starts came in at a 1.5% MoM gain for the month of October versus estimates of a 2.2% increase. Building permits fell 0.6% versus estimates of a 0.8% decline. Liquid coupons are currently trading flat – 0+ tic higher.
The USD is off to a nice start on Tuesday, appreciating against the majority of major peers. YTD, the DXY is trading about 2.66% higher, and is currently being exchanged at 96.58, 0.43% higher.
Oil is hovering near a 12-month low in the AM as crude investors continue to flee the scene amidst increasing supply reports. WTI is currently trading at 54.32, 5.03% lower.