Mortgage Hardly Moved... Again

Mortgage rates hardly moved today – as it is the same thing you have been reading here for the past several weeks.  The 10yr note yield declined today to 2.31% this morning but it did not hold. As I have stated many times, the 10yr has very strong resistance at 2.32%. When the 10yr dropped to 2.31% it touched the 100-day moving average, also a solid road block (still below its 20 and 40 day averages). The stock market in a big rally in the DJIA.

This morning the Nov consumer confidence index blew the doors off, increasing to 129.5, the strongest reading since 2000. The strength is derived from the labor market where a very low 16.9% describe jobs as currently hard to get. This reading is closely watched and will boost expectations for another strong monthly employment report. Positives on the jobs outlook, increasing nearly 4 percentage points to 22.6% and nearly double pessimists who are down 6 tenths to only 11.0%. Confidence is likewise booming for the stock market where 46.0% see stocks rising over the next year which is up 3.8 points from October. Bears are down to 19.0% from last month's 22.7%.

Pres. Trump this morning announced he would meet with the Senate leaders to talk about increasing the debt ceiling set to expire on December 8th. After his Tweet Leading Democrats said they would not attend the meeting. Trump commented in his Tweet that “Meeting with ”Chuck and Nancy“ today about keeping government open and working,” …... “Problem is they want illegal immigrants flooding into our Country unchecked, are weak on Crime and want to substantially RAISE Taxes. I don’t see a deal!” Nancy Pelosi and Chuck Schumer after the morning Tweet said they would not attend.  

Jerome Powell testified at his Senate confirmation hearing today, as he did well and is going to be confirmed when the entire Senate votes. The tax bill(s) are moving forward - now the heavy lifting.

In summary, bonds were nearly unchanged this afternoon, despite a Fed member's dovish inflation comments and a North Korean missile launch.  Like yesterday, I continue to favor floating with a great deal of caution for now.   We do get GDP data tomorrow which can move the markets, but the more important data is coming Thursday with the release of consumer inflation.  Bonds are holding up very well today in a pretty tight range waiting for motivation to move.