Stocks are lower and Mortgage Bonds are attempting to rebound this morning.
The NAR Settlement is slated to go into effect Mid-July, where one of the main changes is that buyers’ agent commissions will no longer be able to be posted on the MLS. There are workarounds, where agents can post the commissions on their own websites and other means of advertising, so long as it is not on the MLS. But there are reports that the Department of Justice may revisit this and could potentially not allow them to be posted anywhere. This is just speculation at this point, but something to keep an eye on. We will keep you posted as we get more clarity.
Oil prices are rising, but for a pretty scary reason. The US is warning that there is the potential for a strike from Iran on Israel. There is talk if that happens, Israel said that they would retaliate as well, which obviously is a big escalation. Let’s pray that this does not escalate, but from an economic perspective, rising oil prices adds upward pressure on inflation and WTI has risen above $87/barrel.
Fed Comments
We heard from Boston Fed President, Susan Collins, who said she believes the Fed will get two 25bp cuts in this year, as she thinks it will take longer to get inflation to their target. She is still expecting that we're going to see demand slow throughout the year, which will help to bring inflation down.
Next Week
Monday: Retail Sales, NAHB Housing Market Index
Tuesday: Housing Starts
Wednesday: Mortgage Apps, 20-year Bond Auction
Thursday: Initial Jobless Claims, Existing Home Sales
Technical Analysis
Mortgage Bonds managed to hold at support at 99.647 and are trying to bounce higher. While the day has not finished yet, if it did, the three-day candle pattern is a “Morning Star” pattern. After a downtrend, and off Fibonacci support, this pattern would portend higher Bond prices ahead. If we saw a rebound, we would also confirm a positive stochastic crossover, which would help from a momentum standpoint.
The 10-year Treasury Note Yield is down 7bp this morning and is trading at 4.50%. While this is still high, it’s better than the 4.60% level yesterday. The current two-day candle pattern is a “Bearish Engulfing” pattern, and if the market closed like this, would portend lower yields ahead. A drop in yields would also cause a negative stochastic crossover, which would show that there is momentum for yields to move lower.
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