Mortgage rates await jobs data as Fed rate cut drama emerges 🌊⚠️📉
Midweek Market Update
Welcome to the Midweek Update!
Included in this update are the following:
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NOVEMBER 19 ⏪
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Bond markets gave up small early gains after Fed Minutes from the last FOMC showed no urgency to cut in December.
In recent weeks mortgage rates have been choppy while still holding support at the base of August’s big bond rally.
Adding some extra fuel to the day’s weakness was an announcement from the BLS that the December Non-Farm Payrolls employment report (NFP) will be pushed back to Dec 16, almost a full week after the next Fed meeting.
This means the FOMC will be making a rate decision without the most recent NFP jobs data (November).
However, tomorrow (Thursday) we finally get the September jobs report that was originally scheduled for October 3, before the shutdown postponed all government data.
In other markets, equities are mostly flat over the last 5 trading days, while precious metals shed a few percent.
Crypto was less stable as selling pressure continues with Bitcoin now 30% off all-time highs.
IMPACT CALENDAR 📅
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Non-Farm employment data is part of my “Big 3” (labor, inflation, the Fed).
However, the NFP report tomorrow is based on September data.
Although this report is still important, recent ADP payrolls have already given us a more current sense of labor market weakness.
Here is what remains on the calendar this week.
**Events marked blue could be delayed as a result of the shutdown
MORTGAGE RATE PRICES 📉
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Mortgage rates do not rise or fall, instead the PRICE of rates change.
The LendZen Index calculates a daily change in the price of mortgage rates by tracking a spectrum of mortgage-backed securities (MBS).
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24-Hour: -2 bps (-$20 per $100K)
5-Day: +6 bps ($56)
10-Day: -14 bps (-$141)
30-Day: -10 bps (-$100)
60-Day: -97 bps (-$966)
Learn more about the LendZen Index and explore the full data series at LendZen.substack.com
MORTGAGE SPREADS 🧈
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Published daily with the LendZen Index is the LendZen Mortgage-Treasury Spread.
The LMTS uses actual bond yields to create a historically consistent, and reliable, data set.
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Nov 12: 1.11
Nov 19: 1.12
24h: -2 bps
5d: +1 bps
12m Avg: 1.30
YoY: -29 bps
Learn more about the importance of accurately calculating spreads on this Substack post.
RATE LOCK GUIDE 🔒
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The LendZen LOCK-O-METER provides borrowers with a risk-weighted score based on how various macroeconomic events, including market data, central bank announcements, and geopolitics, each historically impacts the price of bonds.
higher risk scores = lean towards locking
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Closing Window
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[ 15 Days ] — 85 🔴
An overall hawkish tone from the Fed, plus sliding bond prices, amplify the short-term float risks. News of the delayed November NFP data compounds uncertainty ahead of the December FOMC meeting.
[ 30 Days ] — 70 🟠
A backlog of delayed data and no clear guidance from the Fed keeps volatility alive. Expect choppy trading and limited float windows through month-end.
[ 45 Days ] — 61 🟡
The outlook has worsened slightly as uncertainty from all sectors makes it difficult to get a directional read on markets.
[ 60 Days ] — 45 🟡
Still the most stable zone, but longer-term optimism is waning as the disinflation narrative is getting desperate for new data.
Learn more about the Lock-O-Meter and when to lock your rate in this Substack post.
STOCK MARKETS (5-Day) 📊
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DJIA: 46,139 (-2.29%)
S&P 500: 6,642 (-0.45%)
NASDAQ: 24,644 (-0.07%)
CRYPTO (1-Week) 🧮
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Bitcoin: $89,622 (-13.09%)
Ethereum: $2,945 (-13.73%)
Solana: $133 (-12.25%)
PRECIOUS METALS (5-Day) 🪙
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Gold: $4,071 (-2.47%)
Silver: $51.07 (-4.11%)
Platinum: $1,532 (-5.31%)
Thanks for reading.
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