Bond Market Update

Data Recon

• New home sales declined 17.3% month-over-month in October to a seasonally adjusted annual rate of 610,000 units (Briefing.com consensus 718,000) from an unrevised 738,000 in September. On a year-over-year basis, new home sales were down 9.4%.
  • The key takeaway from the report is that new home sales, which are tabulated when contracts are signed, dropped sharply in October as mortgage rates rose sharply in the wake of the Fed's first rate cut in September. The effects of the hurricanes were also likely to blame for the extra weakness seen in the South, which is the nation's biggest region for new home sales.
• The Conference Board's Consumer Confidence Index jumped to 111.7 in November (Briefing.com consensus 113.0) from an upwardly revised 109.6 (from 108.7) in October. The cutoff date for responses was November 18, so after the election.
  • The key takeaway from the report is that consumers' view of the present situation picked up nicely, particularly as it relates to the labor market. That is noteworthy because, if consumers feel good about job security and/or their ability to find a new job, they are apt to keep spending freely on discretionary goods/services.
• Yield Check:
  • 2-yr: +1 bp to 4.28%
  • 3-yr: +3 bps to 4.24%
  • 5-yr: +4 bps to 4.21%
  • 10-yr: +5 bps to 4.31%
  • 30-yr: +4 bps to 4.49%