MBS prices are down about 1/32 this morning while the DOW is down about 150 points amid a broader rotation from tech to value names. Treasury yields rose, with the 10-year yield stepping higher to top 4.18% and the 30-year yield rising above 4.85%. Investors are switching out of tech as fears about AI over-valuations get a reboot, as Broadcom followed Oracle in delivering earnings that left Wall Street wanting more. The chipmaker failed to deliver clarity on an AI payoff, stirring concerns about tighter profit margins instead. Its shares dropped over 10% Friday, despite its quarterly earnings beat. At the same time, cyclical stocks, those more sensitive to the economy, got a bid following the Federal Reserve’s third interest-rate cut of the year. The expected easing comes amid rising optimism for US growth, helping drive broader bullishness for stocks. The rate cut also helped drive gold prices to touch a fresh record as the precious metal is set for its best year since 1979. Wall Street’s ugly turn on this morning puts the tech-centric gauges on track for weekly losses, in a week that had investors weighing that rate cut and the Fed’s likely policy moves in 2026.Today’s lone economic report showed that US wholesale inventories rose by 0.5% to around $911.5 billion in September 2025, after a revised 0.1% decrease in August and better than market estimates of a 0.1% uptick. This marked the strongest increase in inventories since February. Non-durable goods inventories picked up 0.7%, following a 0.1% fall in the previous month, mainly on the back of drugs (+1.9%) and petroleum (+1.1%). At the same time, durable goods inventories rose by 0.3%, bouncing from a 0.1% decrease in August, with notable stock builds in computer equipment (+4.1%), electrical equipment (+2.4%) and metals (+1.6%), partly offset by a 3.2% decline in miscellaneous durables. On a yearly basis, wholesale inventories increased by 1.8%.

MBS prices are up about 5/32 this morning while the DOW is up about 600 points as US stocks diverged, with more tech-exposed gauges under pressure after Oracle earnings revived AI overspending worries. Meanwhile, the Dow Jones Industrial Average gained 1% to set a new all-time intraday high. Yesterday’s broad market rally came as a split Fed voted to lower rates for the third time this year. Policymakers signaled a more gradual path of easing in the months ahead, but Chair Jerome Powell hinted that a rate hike would be off the table for January, while talking up the US economy’s strength. Powell said the Fed is “well positioned to wait and see” how economic conditions evolve, adding that tariffs imposed under President Trump have contributed to inflation pressures that the central bank sees as a “one-time” increase. That put the spotlight on a weekly update on jobless claims. Initial jobless claims for the week ending December 6 increased by 44,000 to 236,000. Poor seasonal adjustment factors have attracted blame for the big week-over-week jump in initial claims from the Thanksgiving week. Continuing jobless claims for the week ending November 29 decreased by 99,000 to 1.838 million, which is the lowest since April 2025. The key takeaway from the report is that, on balance, it doesn’t point to a material weakening in the labor market. The September trade deficit narrowed to $52.8 billion (Briefing.com consensus: -$61.7 billion) from an upwardly revised $59.3 billion (from -$59.6 billion) in August. The key takeaway from the report is that the narrower deficit was the byproduct of exports being $8.4 billion more than August exports and imports being $1.9 billion more than August imports.

MBS prices are up about 3/32 this morning while the DOW is up about 200 points as Wall Street waits for the Federal Reserve’s final policy decision of the year. The relatively muted action follows several sessions of sideways trading as investors hold off on big bets ahead of the Fed’s announcement. Markets are pricing in a nearly 90% chance the central bank will deliver its third consecutive quarter-point rate cut, according to the CME FedWatch tool. But the decision isn’t without tension. FOMC members remain split, with some officials arguing that easier policy is needed to support a cooling labor market and others warning that further easing could risk reigniting inflation. Traders will be watching the post-meeting statement, set for release at 11:00 am PT, and Chair Jerome Powell’s press conference for clues on how the committee is thinking about the path forward. Meanwhile, global bond yields rose to highs last seen in 2009 ahead of the decision, a sign investors are concerned that interest rate cutting cycles from the US and elsewhere may be ending soon. The volume of mortgage applications in the US rose 4.8% in the first week of December compared with the previous week, rebounding from a three-month low, according to data from the Mortgage Bankers Association (MBA). Applications to refinance a home loan surged 14.3% from the prior week and were 88% higher than the same week last year. The refinance share of total mortgage activity rose to 58.2% from 53.0% the previous week. Demand for Federal Housing Administration (FHA) refinances jumped 24% as the FHA 30-year fixed-rate fell to 6.08%, the lowest level since September 2024. In contrast, the average rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) edged up slightly to 6.33% from 6.32%. Meanwhile, applications for mortgages to purchase a home declined 2.4% for the week but remained 19% higher than a year ago, with potential buyers also turning to FHA loans for additional savings.

MBS prices are down about 2/32 this morning while the DOW is down about 110 points as the Federal Reserve’s December policy meeting kicked off and federal data showed job openings unexpectedly ticked higher even as layoffs jumped. Long-delayed data from the Bureau of Labor Statistics showed job openings ticked up in October, in a move that ran contrary to forecasts. Job openings in the United States increased by 12,000 to 7.670 million in October 2025, up from 7.658 million in September, according to delayed data from the US Bureau of Labor Statistics. The September figure showed a 431,000 jump from August’s 7.227 million, with both months surpassing expectations of 7.2 million. But labor market worries persist, even in the JOLTS report, which also found layoffs increased in the month. The NFIB Small Business Optimism Index in the US rose to 99 in November 2025, the highest in 3 months, compared to 98.2 in October, and beating forecasts of 98.4. The net percent of owners expecting higher real sales volumes rose 9 points to a net 15%. Meanwhile, 21% of small business owners cited labor quality as their single most important problem, down 6 points from the previous month. When asked to evaluate the overall health of their business, 11% reported it as excellent (down 1 point), and 53% as good (up 2 points). The spotlight is on the Fed’s two-day meeting and its final policy decision of the year, due tomorrow. Markets are all but convinced of getting a quarter-point rate cut to match similar moves in September and October, with 89.6% odds currently priced in. Given that, investors have switched to watching the Fed for clues to whether 2026 will bring more easing, but the chances of that are less certain in the wake of December’s “hawkish cut.” White House economic adviser Kevin Hassett, largely seen as the favorite for next Fed chair, has struck a cautious tone, saying it would be “irresponsible” to set out plans for the next six months. Trump suggested in an interview released Tuesday that he would be looking for a new chair to immediately move to cut rates.

MBS prices are down about 4/32 this morning while the DOW is down about 170 points as Wall Street heads into a pivotal week dominated by the Federal Reserve’s final policy meeting of 2025. Markets are on the lookout for risks to almost-total confidence that the Fed will cut interest rates at its two-day policy meeting, which starts on Tuesday. After a recent surge in optimism, traders now see an 88% probability of a cut in Wednesday’s decision, compared with 67% odds a month ago, per CME FedWatch. A tame reading on September PCE consumer inflation kept that conviction alive on Friday, buoying appetite for risk and helping spur back-to-back weekly gains for the major gauges. The consensus has emerged despite a split among policymakers, in part over whether to focus on the labor market or inflation — which some at the Fed worry could still be too high. But backing from influential officials for the third cut of this year has cemented bets, though the prospects for 2026 are seen as less certain. Given that, this week’s raft of economic data will be keenly eyed, with the labor market in the spotlight after a mixed bag of readings last week. The postponed October report on JOLTS job openings finally arrives tomorrow to shed light on hiring activity, layoffs, and the pace at which workers are quitting. There are no economic reports scheduled for today.