Thanksgiving week usually not much movement with reserves holding down the fort. We do get housing data, starts and permits and existing home sales. By noon Wednesday, it will be mostly over for the rest of the week as the holiday schedules become more pronounced. As long as there is nothing of substance from Europe or China this week will be quiet.
Over the weekend the Asia-Pacific summit ended with acrimony between the US and China. VP Pence saying the US is in no hurry to make a deal on tariffs against China until China agrees to change its ways. Pence laid China low when he commented that nations should avoid loans from China in order not to be beholden to the country. In about two weeks Trump and Xi are expected to sit down at the G-20 meeting, given the comments from Pence and others in attendance at the summit, trade optimism has lessened for the moment. The Asia-Pacific Economic Cooperation failed to agree on a joint statement for the first time in its history.
At 9:30 am ET a quiet open in stocks and not much movement n the bond and mortgage markets.
At 10:00 am the Nov NAHB housing market index expected unchanged at 68; a huge decline in the index to 60 the weakest since Aug 2015. The change is the largest in either direction we have seen in two years.
Not a direct market-mover but the chair of Nissan is being ousted for not reporting all of his income. The news rattled the European equity market, with shares of Renault falling as much as 15 percent in Paris, while Nissan’s global depository receipts sank more than 11 percent.
President Trump still hasn’t joined the CIA’s report that the Saudi Crown Prince MBS (Mohammed bin Salman) ordered the killing of journalist Jamal Khashoggi. MBS has staunchly denied he was the author of the assassination. Trump has to be deliberate in his reactions and comments, Saudi Arabia is a strong ally in the mid-east. Over the weekend the Washington Post revealed that the CIA has concluded Mohammed himself ordered Khashoggi’ s assassination. According to the CIA, a team of 15 Saudi agents flew to Istanbul on government aircraft in October and killed Khashoggi inside the Saudi Consulate, where he had gone to pick up documents that he needed for his planned marriage to a Turkish woman.
Last Friday the 10 note hit our first technical resistance when it moved to 3.06%; the next resistance that will be difficult to break is 3.00%; given the current conditions unless there are new reasons to move into treasuries investors and money managers easily invest in the 10
yr. note with a yield that has a 2 handle.
This Week’s Calendar:
10:00 am Nov NAHB housing market index, expected unchanged at 68, as released the index at 60.
8:30 am October housing starts and permits (starts 1240K +3.2%; permits 1260K +1.5%)
8:30 am weekly jobless claims (215K -1K)
- October durable goods orders (-2.4%, ex transportation +0.4%, core capital goods orders +0.3%)
10:00 am October existing home sales (5.20M +1.0%)
- U. of Michigan final Nov consumer sentiment index (unch at 98.3)
- October leading economic indicators (+0.1%)
Early close for stocks and bonds (stocks at 12:00 pm bonds at 2:00 pm)
PRICES @ 10:00 AM
10 yr. note: -1/32 (3 bp) 3.07% unch
5 yr. note: unch 2.88% unch
2 Yr. note: +1/32 @.79% -1 bp
30 yr. bond: -7/32 (22 bp) 3.33% +1.5 bp
Libor Rates: 1 mo. 2.300%; 3 mo. 2.644%; 6 mo. 2.862%; 1
yr. 3.123% (11/16/18)
30 yr. FNMA 4.5: @9:30 102.58 -6 bp (+11 bp from 9:30 Friday)
15 yr. FNMA 4.0: @9:30 101.74 -4 bp (-4 bp from 9:30 Friday)
30 yr. GNMA 4.5: @9:30 102.81 -5 bp (+9 bp from 9:30 Friday)
Dollar/Yuan: $6.9435 +$0.0055
Dollar/Yen: 112.62 -0.19 yen
Dollar/Euro: $1.1430 +$0.0013
Dollar Index: 96.37 -0.07
Gold: $1222.90 -$0.50
Crude Oil: $55.23 -$1.23
DJIA: 25,267.79 -145.43
NASDAQ: 7156.54 -91.33
S&P 500: 2720.85 -15.42