Dow jumped 432, advancers over decliners better than 5-2 & NAZ advanced 305. The MLP index added 1+ to 321 & the REIT index went up 2 to the 401s. Junk bond funds eased a little higher & Treasuries were little changed, keeping yields about even. Oil slid back to the high 77s on supply fears & gold inched up 1 to 2752 following recent strength.
Dow Jones Industrials
Mortgage rates continued their upward climb this week, leaping above 7% & adding further pressure on the stagnant housing market. Freddie Mac's latest Primary Mortgage Market Survey showed that the average rate on the benchmark 30-year fixed mortgage jumped to 7.04%, up from last week's reading of 6.93%. The average rate on a 30-year loan was 6.60% a year ago. "Mortgage rates ticked up for the fifth consecutive week and crossed seven percent for the first time since May of 2024," said Sam Khater, Freddie Mac's chief economist. "The underlying strength of the economy is contributing to this increase in rates." The average rate on the 15-year fixed mortgage climbed to 6.27% from 6.14% last week. 1 year ago, the rate on the 15-year fixed note averaged 5.76%.
Mortgage rates climb to the highest level for the first time in months
Pres-elect Trump said he spoke on the phone with Chinese Pres Xi Jinping about, TikTok, fentanyl, trade & more. “The call was a very good one for both China and the U.S.A.,” Trump said. “It is my expectation that we will solve many problems together, and starting immediately,” said the pres-elect, who is set to be sworn into office on Mon. “We discussed balancing Trade, Fentanyl, TikTok, and many other subjects. President Xi and I will do everything possible to make the World more peaceful and safe!” Trump added. Xi after the call said that he & Trump both expressed hope for greater progress in US-China relations. Trump's talk with Xi about TikTok came shortly before the Supreme Court upheld a federal law that will effectively ban the popular video-sharing app in the US. The law is set to take effect Sun. It is unclear how Trump, who has credited TikTok with helping him defeat VP Kamala Harris in the Nov 5 election, will handle the impending ban.
Trump and China’s Xi discuss TikTok, trade, fentanyl, president-elect says
Treasury yields fell, pulling back further from recent highs as investors assess the US inflation outlook. The 10-year Treasury fell more than 2 basis points to 4.584% & the 2-year Treasury yield slipped around 1 basis point to 4.23%. 1 basis point is equal to 0.01%, & yields & prices have an inverted relationship. Treasury yields plummeted on Wed, with the 10-year yield sliding 13 basis points & the 2-year yield dropping 10 basis points. Earlier this week, the benchmark yield hit its highest level in 14 months. That was after Dec's consumer price index was published & the core inflation rate slowed to 3.2% on an annual basis, lower than the 3.3% forecast. Core inflation, excluding volatile food & energy prices, grew 0.2% on a monthly basis, which was also lower than expected. Headline inflation was up 0.4% on a monthly basis & 2.9% on an annual basis. After the release of this data, Federal Reserve Governor Christopher Waller said that the central bank may lower interest rates multiple times this year if inflation continues to ease. “As long as the data comes in good on inflation or continues on that path, then I can certainly see rate cuts happening sooner than maybe the markets are pricing in,” Waller noted.
10-year Treasury note yield falls, continuing retreat from 14-month high
Stocks jumped amid a tech stock revival, as investors assessed a week of key data, earnings reports & eyed likely policy shifts under a Trump administration. Markets have turned upbeat as investors took stock of recent big bank earnings & inflation readings, which have revived bets on interest-rate cuts. Stocks are on track for big weekly wins after a major rally on Wed, while the 10-year Treasury yield pulled back to trade around 4.6%.
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