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Market Matters – June 12, 2021 Edition


 

We have seen a nice push lower, with the 10-year at 1.435%. This is a bit surprising as we head into summer, we have the reopening trade and inflation running hotter than expected. Part of the issue may be that with the weaker than expected jobs number last Friday, we have traders on the wrong side of the trade and they are having to unwind their positions, driving the 10-year even lower. The 10-year is definitely looking overbought here technically, although stochastics haven’t crossed yet so there may be some more momentum to carry this even lower. That said, we still wouldn’t be shocked to see at least see some consolidation as we have traveled a good distance this week and are bound to run out of momentum at some point.

 

Initial Jobless Claims
Initial Jobless Claims dropped -9k to 376k for the week ending June 5th vs. the prior week’s unrevised level of 385k. This is now the lowest level since mid-March 2020, while it is also the sixth consecutive week of declines. The 4-week moving average was 402.5k, which is down by -25.5k from the prior week’s unrevised average of 428k. Continuing claims, which lag by a week, fell by -258k for the week of May 29th, down to 3.499mln from the revised handle of 3.757mln (orig. 3.771mln).
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Consumer Price Index

CPI for May posted hotter than expectations, seeing a +.6% rise on headline, with the ex-food/energy core index up +.7%. Looking at the YoY figures, headline CPI rose from +4.2% to +5.0%, while the core rose from +3.0% to +3.8%. The headline print represents the largest YoY gain since the +5.3% increase back in August 2008, with the core reading at the fastest pace since May 1992. Within the data for May, used cars and trucks prices continued to rise, up +7.3% MoM and up +29.7% YoY. The energy index was mostly flat on the month, although the gasoline index is up +56.2% YoY, which takes the energy index up +28.5% YoY. Food prices continued their charge higher as well, matching April’s gain of +.4%. Looking YoY however, food prices have not been nearly as volatile, only up +2.2%. Other sectors seeing monthly gains include airfares +7.0%, car and truck rental prices +12.1%, transportation +2.0%, lodging up +.4%, housing +.4%, apparel +1.2%, recreation +.2%, and education +.3%.

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JOLTS Report
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Mortgage Applications

 




We feel bearish on the market as the 10-year is at 1.454%. We have resistance at 1.39%, while we have support at 1.464%, then at 1.52. The market has rallied this past week, so, it is definitely a good time to get a few loans locked in.

 

Call today to discuss this week’s market trends.

 

 

Pam Jamison
Loan Originator
NMLS# 277012
8310-1 N. Capital of Texas Highway, Suite 195, Austin, TX 78731
512-775-1001 | 512-582-8778
pam.jamison@primelending.com | 
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