Tuesday 11/4 ... Market Data

By: Matthew Graham •
  • Factory Orders Fell by a record amount.
    • down 2.5% versus consensus of a .8% decline. August was revised down as well from -4.0 to -4.3.
    • Excluding transportation, orders were down 3.7% which is the record (although 1989 was higher, different industry classifications were in effect at that time)
  • Nondurables fell 5.5%, also extreme
  • Durable goods orders rose .9% in september which is a revision up from the .8% increase reported last week.
  • Year over year, factory orders are still in the black to the tune of 5.3% and 8.4% excluding trans.


  • In other news, Dallas Fed Pres. Richard Fisher said that the fed is working on dealing with the credit crisis with "a limited number of tools" and that "efforst must be omplemented by fiscal policy" as well as regulator initiatives. Overall, he was laudatory regarding the speed and efficacy of Fed intervention, yet was quite clear in conveying the general sentiment that hard times are ahead and more still needs to be done.

How has MBS responded to the data? Rather predictably given the backdrop of recent market events. In other words, no market participant cares much about any scheduled data right now as all are awaiting election results, additional TARP info, and Friday's "real" data when NFP comes out.

MBS are still moving sideways in the 100-08+ day trading range.

All hands on deck for the float boat. If you have deals that must go to docs this week, you can pretty much "pick a day" as far as locking is concerned. Not much MBS price change looks to be occurring in the absence of something TARPy, an election surprise, or Friday's data. Beyond short term deals, it seems we are slowly but surely in an uptrend of late following last week's oversold state. We'll need friendly data to break through, but we're getting close, and should we encounter MBS-unfriendly data, you will of course be ready to lock at a moment's notice.

Remember, the last two months of this year should be extremely choppy, with plenty of BRIEF opportunities to "get while the getting's good." The new year will bring new balance sheet space for MBS and hopefully some housing market activity stimulated by fiscal policy and other intervention efforts.

Stay tuned... MBS volume is less than half of it's recent norm, so don't read too much into price fluctuations today, but don't tune out either.