Market Wrap-up
Inflation Nation: The Fed’s key measure of inflation, Core PCE (Ex food and energy) increased in May by 0.3% on a MOM basis on top of April’s increase of 0.4%. The consensus estimates were from 0.4%. YOY, Core PCE was up by 4.6% vs. est. of 4.7%. The headline PCE was up by 0.1% which was much lighter than forecasts of 0.5%. YOY, it was up 3.8% vs. est. of 4.6%. So, this is a mixed bag with ugly, stubborn levels at the core level but some moderation at the headline level.
Incomes and Spending: Personal Incomes were up 0.4% vs. est. of 0.4%. Private Worker Wages rose by 5.8% YOY, which is the highest since Oct 2022 and Government Worker Wages increased by 5.5% YOY which is the highest since May 2022. Personal Spending took a step back in May, up only 0.1% after being up 0.6% in April.
Rosie the Riveter: The June Chicago PMI continues to paint an ugly picture in the manufacturing sector with a contractionary reading of 41.5 vs. est. of 44.0
Consumer Sentiment: The final/revised June UofM Consumer Sentiment Index was revised upward from 63.9 to 64.4. The one year inflation outlook dropped from 4.2 to 3.3 and the 5 year outlook remained at 3.0%.
Quiet today in the bond and mortgage markets, interest rates generally lower heading into what is essentially a three-day week next week. Treasuries will trade Monday with an early close at 2:00 pm, there are data points, although unless some unexpected news hits most main traders won’t show up. The key 10 year note breached its month-long high yield slightly increasing above 3.84% that has held all buying since the beginning of June, ,increasing to 3.88% this morning although it quickly fell back to 3.81% -4 bps on the day.
Inflation measured by the PCE core (less food and energy) declined 1 bp to 4.6% from 4.7% in May, the lowest inflation since April 2021. The U. of Michigan consumer sentiment index edged a little higher, increasing to 64.4, the 2nd best index read this year. Consumers remain resilient even as interest rates have increased.
Last Tuesday the Conference Board released its consumer confidence index. Confidence increased much stronger than forecasts. The confidence index expected at 103.7 from 102.3, increased to 109.7.
The Fed remains intact to increase the FF rate at the July FOMC meeting (7/26). Still have some doubters out there thinking the Fed may pass again, wishful thinking. You must be ignoring everything the Fed and Jerome Powell have been saying over the last two weeks to make that assessment. The financial media and the guests they interview still willing to offer up the view the Fed will lower rates by the end of the year. In market time that is a long way off, and unless the stock market turns over with heavy selling the Fed and other major central banks must fight its 2.0% inflation target now at 4.6%, inflation isn’t likely to decline 2.5% over the next six months; the Fed is serious as are the ECB, BofJ, BofE.
Next Week: Monday HIS manufacturing final for June, May construction spending. ISM June manufacturing index. Tuesday closed. Wednesday MBA mortgage apps, ADP private jobs report, May factory orders. Thursday weekly jobless claims, May US trade deficit, HIS services final index for June, JOLTS job openings. Friday June employment data from the BLS. Although it is generally a three-day week the data is critical.
This Week: The 10 year note yield this week increased 5 bps. FNMA 6.0 30 year coupon this week declined 17 bps. The DJIA gained 1.136, NASDDAQ +294, S&P +102. Crude oil +$0.26, gold -$3.00. The US dollar this week unchanged from the prior week. Bitcoin -437.
PRICES @ 4:00 PM 06.30.2023
10 year note: 3.81% -3 bp
5 year note: 4.12% -2 bp
2 year note: 4.87% unch
30 year bond: 3.84% -6 bp
Libor Rates: N/A
30 year FNMA 6.0: 100.83 +5 bp (unch from 9:30 am)
30 year FNMA 5.5: 99.50 +9 bp (+2 bp from 9:30 am)
30 year GNMA 5.5: 99.53 +11 bp (+3 bp from 9:30 am)
Dollar/Yuan: $7.2535 +$0.0009
Dollar/Yen: 144.28 -0.51 yen
Dollar/Euro: $1.0910 +$0.0046
Dollar Index: 102.89 -0.45
Gold: $1927.40 +$9.50
Bitcoin: 30.380 -27
Crude Oil: $70.53 +$0.67
DJIA: 34,407.60 +285.18
NASDAQ: 13,787.92 +196.59
S&P 500: 4450.38 +53.94
Poland
| NAME | VALUE | NET CHANGE | % CHANGE | 1 MONTH | 1 YEAR | TIME (EDT) |
| WIG20:IND
|
2,060.38 | -1.73 | -0.08% | +2.10% | +22.00% | 11:15 AM |
| WIG:IND
|
67,283.25 | +37.97 | +0.06% | +2.48% | +25.92% | 11:15 AM |
| WIG30:IND
|
2,534.38 | +0.19 | +0.01% | +2.35% | +22.19% | 11:1 |
| CURRENCY | VALUE | CHANGE | NET CHANGE | TIME (EDT) |
| EUR-USD
|
1.0909 | 0.0044 | +0.41% | 4:59 PM |
| USD-JPY
|
144.3100 | -0.4500 | -0.31% | 4:59 PM |
| GBP-USD
|
1.2703 | 0.0090 | +0.71% | 4:59 PM |
| AUD-USD
|
0.6664 | 0.0048 | +0.73% | 4:59 PM |
| USD-CAD
|
1.3242 | -0.0010 | -0.08% | 4:59 PM |
| USD-CHF
|
0.8956 | -0.0039 | -0.43% | 4:59 PM |
| USD-CZK
|
21.7789 | -0.0563 | -0.26% | 4:59 PM |
| USD-SKK
|
27.6157 | -0.1112 | -0.40% | 4:59 PM |
| USD-PLN
|
4.0640 | -0.0302 | -0.74% | 4:59 PM |
| USD-HUF
|
341.6300 | -0.1300 | -0.04% | 4:59 PM |
| USD-RUB
|
89.3148 | 2.0281 | +2.32% | 11:07 AM |
| USD-MXN
|
17.1248 | -0.0012 | -0.01% | 4:59 PM |
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| ELITE 21-30 YEAR | ELITE 16-20 YEAR | ||||||
| RATE | 15 DAY | 30 DAY | 45 DAY | RATE | 15 DAY | 30 DAY | 45 DAY |
| 7.625 | -3.257 | -3.207 | -3.077 | 7.625 | -3.725 | -3.675 | -3.545 |
| 7.500 | -3.015 | -2.965 | -2.835 | 7.500 | -3.434 | -3.384 | -3.254 |
| 7.375 | -2.644 | -2.594 | -2.464 | 7.375 | -3.086 | -3.036 | -2.906 |
| 7.250 | -2.306 | -2.256 | -2.126 | 7.250 | -2.788 | -2.738 | -2.608 |
| 7.125 | -2.164 | -2.114 | -1.984 | 7.125 | -2.541 | -2.491 | -2.361 |
| 6.999 | -2.037 | -1.987 | -1.857 | 6.999 | -2.398 | -2.348 | -2.218 |
| 6.875 | -1.613 | -1.563 | -1.433 | 6.875 | -2.027 | -1.977 | -1.847 |
| 6.750 | -1.218 | -1.168 | -1.038 | 6.750 | -1.725 | -1.675 | -1.545 |
| 6.625 | -1.157 | -1.107 | -0.977 | 6.625 | -1.652 | -1.602 | -1.472 |
| 6.500 | -1.079 | -1.029 | -0.899 | 6.500 | -1.583 | -1.533 | -1.403 |
| 6.375 | -0.578 | -0.528 | -0.398 | 6.375 | -1.151 | -1.101 | -0.971 |
| 6.250 | -0.139 | -0.089 | 0.041 | 6.250 | -0.840 | -0.790 | -0.660 |
| 6.125 | -0.099 | -0.049 | 0.081 | 6.125 | -0.353 | -0.303 | -0.173 |
| 5.999 | 0.023 | 0.073 | 0.203 | 5.999 | -0.251 | -0.201 | -0.071 |
| 5.875 | 0.681 | 0.731 | 0.861 | 5.875 | 0.236 | 0.286 | 0.416 |
| 5.750 | 1.320 | 1.370 | 1.500 | 5.750 | 0.626 | 0.676 | 0.806 |
| 5.625 | 1.377 | 1.427 | 1.557 | 5.625 | 1.228 | 1.278 | 1.408 |
| 5.500 | 1.793 | 1.843 | 1.973 | 5.500 | 1.567 | 1.617 | 1.747 |
| 5.375 | 2.498 | 2.548 | 2.678 | 5.375 | 2.063 | 2.113 | 2.243 |
| 5.250 | 3.241 | 3.291 | 3.421 | 5.250 | 2.551 | 2.601 | 2.731 |
| 5.125 | 3.468 | 3.518 | 3.648 | 5.125 | 2.995 | 3.045 | 3.175 |
| 5.000 | 4.111 | 4.161 | 4.291 | 5.000 | 3.623 | 3.673 | 3.803 |
| ELITE 11-15 YEAR | ELITE 8-10 YEAR | ||||||
| RATE | 15 DAY | 30 DAY | 45 DAY | RATE | 15 DAY | 30 DAY | 45 DAY |
| 7.000 | -2.362 | -2.312 | -2.182 | 7.000 | -2.253 | -2.203 | -2.073 |
| 6.875 | -2.139 | -2.089 | -1.959 | 6.875 | -2.033 | -1.983 | -1.853 |
| 6.750 | -1.824 | -1.774 | -1.644 | 6.750 | -1.737 | -1.687 | -1.557 |
| 6.625 | -1.724 | -1.674 | -1.544 | 6.625 | -1.640 | -1.590 | -1.460 |
| 6.500 | -1.660 | -1.610 | -1.480 | 6.500 | -1.560 | -1.510 | -1.380 |
| 6.375 | -1.611 | -1.561 | -1.431 | 6.375 | -1.507 | -1.457 | -1.327 |
| 6.250 | -1.379 | -1.329 | -1.199 | 6.250 | -1.295 | -1.245 | -1.115 |
| 6.125 | -1.022 | -0.972 | -0.842 | 6.125 | -0.940 | -0.890 | -0.760 |
| 6.000 | -0.952 | -0.902 | -0.772 | 6.000 | -0.843 | -0.793 | -0.663 |
| 5.875 | -0.761 | -0.711 | -0.581 | 5.875 | -0.659 | -0.609 | -0.479 |
| 5.750 | -0.337 | -0.287 | -0.157 | 5.750 | -0.255 | -0.205 | -0.075 |
| 5.625 | 0.049 | 0.099 | 0.229 | 5.625 | 0.089 | 0.139 | 0.269 |
| 5.500 | 0.232 | 0.282 | 0.412 | 5.500 | 0.275 | 0.325 | 0.455 |
| 5.375 | 0.505 | 0.555 | 0.685 | 5.375 | 0.543 | 0.593 | 0.723 |
| 5.250 | 0.945 | 0.995 | 1.125 | 5.250 | 0.963 | 1.013 | 1.143 |
| 5.125 | 1.403 | 1.453 | 1.583 | 5.125 | 1.399 | 1.449 | 1.579 |
| 5.000 | 1.495 | 1.545 | 1.675 | 5.000 | 1.500 | 1.550 | 1.680 |
| 4.875 | 1.865 | 1.915 | 2.045 | 4.875 | 1.843 | 1.893 | 2.023 |
| 4.750 | 2.339 | 2.389 | 2.519 | 4.750 | 2.299 | 2.349 | 2.479 |
| 4.625 | 2.848 | 2.898 | 3.028 | 4.625 | 2.776 | 2.826 | 2.956 |
| 4.500 | 2.900 | 2.950 | 3.080 | 4.500 | 2.821 | 2.871 | 3.001 |
| 4.375 | 3.305 | 3.355 | 3.485 | 4.375 | 3.216 | 3.266 | 3.396 |