Market Update: Pretty quiet week, however strong $18 B 20 yr Auction yesterday caused good downward movement in treasury yields (better rates)

Hello All,

This will likely be the final update prior to the holiday break that will start tomorrow afternoon for most. 

We had good price action late day yesterday after there was well above average demand at the 20 yr auction yesterday.  This momentum held up into the overnight session and so far, has held up early this morning.

We are currently sitting around 4.41 on the 10 yr.  There are housing starts data coming out shortly.  Maybe with a week print, we could see the 4.40 level challenged.  It will be a light trading week after today, but overall, we have had some positive news for the lending world over the last several weeks.  It feels a lot better to be sitting at 4.41 than wondering if we will blow through 5.00 and challenge the 5.50 mark that was the narrative 6-8 weeks ago. 

The momentum has shifted away from the bears and to the bulls, which is apparent by the downward momentum in long term yields.

It will be interesting if after the holidays we see a jump in jobless claims.  Many companies hold on and don’t make cuts around major holidays but could lead to a jump in 2 weeks. 

The one variable today for the markets will be the Fed Statement to be released later today.  We already know what it will state, which in general will still have Hawkish tones around leaving future hikes on the table and stating inflation is not where it needs to be.  So, this could create a pull back to where we are right now this afternoon as the market never likes to read the statement and not react even thought they know what it says already in general. 

Have a great holiday break and prepare to come back on Monday ready to focus on outworking the market for the 3-4 weeks until the next holiday break.  It is a great time to land long term relationships.  In the last week I have spoke to countless builder and presented a JV proforma that we expect to get after a referral, one Zoom call and one face to face. 

You don’t win in these markets by not outworking people.  That simple. 

Josh Erskine 

Chief Executive Officer

CalCon Mutual Mortgage LLC dba OneTrust Home Loans
Yellowstone RE Holdings LLC
Yellowstone Global Investments LLC