Friday 7/25 ... At A Glance

By: Matthew Graham •
At A Glance:
  • Durable Goods "Tape Bomb" shows .8% rise versus consensus of .4% decline
  • Excluding autos, Durable Goods up 2.0% versus consensus of .2% decline
  • Adding to bond woes, Consumer sentiment rises significantly to 61.2 versus 56.4 consensus
  • Completing the trifecta of bond-negative news, New Home sales down only .6% to 530k, consensus was 505k.
  • Despite the barrage, MBS doing better than expected.  This is a good sign.
  • Despite the barrage, stocks doing worse than they should be.  This is a good sign
  • QUICK LOCK GUIDE: It looks like we will survive the "tape bomb."  Float intraday, reassessing at the close.
  • VIGILANCE: HIGHER THAN EXTREME.  Volatility will be ridiculous.  Stay Tuned..
abbreviations guide (ongoing list): 
  • Choppy
    • refers the the prices of MBS vacillating wildly (big differences between highs and lows and lots of back and forth in between). 
  • MBS -                 
    • Mortgage Backed Security
  • MDPC-
    • Mid Day Price Change (plus means for the better, minus for the worse)
  • DOW or DJIA -    
    • Dow Jones Industrial Average
  • Ticks-                   
    • 1/32nds of bond pricing.  8 ticks=8/32nds=.25 in cost (YSP or discount)
  • DoD, YoY, MoM-  
    • Day over day, year over year, month over month, etc..
  • O/N-                   
    • Overnight
  • Coupon-               
    • The "interest rate' of the MBS
  • 6.0's, 5.5's           
    • always means FNMA 30yr Fixed MBS with a coupon of that number.  6.0's = 6.0% coupon rate MBS
  • PCE-                    
    • Personal Consumption Expenditures
  • UST-                    
    • United States Treasury Bonds.  5UST = 5 year, 10UST = 10 year, etc.. 
  • NAPM (PMI)         
    • National association of purchasing management (Purchasing Manager's Index)
  • ISM (MFG)           
    • Institute for Supply Management (mfg: manufacturing)
  • Wide/Gap/Gappy  
    • refers to the wideness or gap between treasury yields and MBS yields.
  • "Going Out"          
    • 4:45PM EST.  Official Close is 3pm EST 
  • FI                        
    • "fixed income."  For our purposes, will simply refer to treasuries and MBS 
  • NFP                    
    • Non-Farm Payrolls.  Key part of employment report.  Most meaningful gauge of labor market
  • ADP                    
    • ADP private payrolls, some feel a precursor to NFP, but historically quasi-accurate at best.
  • GSE
    • Government Sponsored Enterprise.  Refers to Fannie Mae and Freddie Mac
  • PPI
    • Producer Price Index. A key inflation indicator. 
  • CPI
    • Consumer Price Index.  An even more key inflation indicator.