A “spike in unusual traffic” caused service degradation for the infrastructure giant, disrupting digital banking for customers.

The average loss from the two categories is almost seven times higher than the mean amount for all other types, according to research from ALTA and Milliman.

The multi-year, $100 million agreement will allow users to take financial actions without leaving the ChatGPT app.

The billionaire and legacy government-sponsored enterprise investor says there is a quick interim fix and they should eventually leave conservatorship.

Independent mortgage bankers were in the black for each loan originated during the third quarter, as low rates brought an application surge in September.

With economic data being the most consistent source of motivation for rates, the market has been eager for it to return with the reopening of the government. While some higher profile reports have been rescheduled for the coming days (i.e. on Thursday, we’ll get the jobs report that we were supposed to get in early October), most updated release dates remain TBD.  Then there are the “surprise” releases–reports that completely skipped the step of being officially rescheduled and were simply released at a random moment with no warning. Such was the case with Jobless Claims data this morning.  Not to be confused with “the jobs report,” weekly jobless claims numbers are inferior in terms of their ability to set the tone for interest rates.  To be fair, they CAN have a moderate impact at times, but their ability to do so is nowhere close to that of the monthly jobs report. Case in point, today’s belated jobless claims data had no impact.  Nonetheless, the reemergence of government econ data is an important proof of concept when it comes to getting an accurate sense of where rates should be heading. While not technically econ data and not affected by the shutdown, Wednesday brings a scheduled event that can be just as relevant as many government reports. At 2pm ET, the Fed will release the minutes of its meeting from late October. This isn’t a rate cut opportunity, but it could shed additional light on the odds of a cut at the mid-December meeting. 

Modest Gains After Mid-Day Volatility

With only a few exceptions, bonds have been a rudderless ship during the government shutdown. With the backlogged data returning in a slow and uncertain fashion, rudder repairs are similarly slow. In today’s case, bonds benefited from overnight strength in overseas bond markets and a bit of ongoing weakness in stocks. The surprise release of stale jobless claims data did nothing to inspire and there was limited benefit from another negative print in the weekly ADP numbers. As soon as EU bonds closed for the day, US bonds began selling off. The damage was short-lived and well contained. The net effect was another in-range day ahead of higher consequence events like Wednesday’s Fed minutes or Thursday’s jobs report. 

Econ Data / Events

ADP Weekly Payrolls 

-2.5k vs -11.25k prev

Jobless Claims (October 18th)

232k vs 223k f’cast, 219k prev

Factory Orders

1.4 vs 1.4 f’cast, -1.3 prev

Builder Confidence

38 vs 37 f’cast, 37 prev

Core Durable Goods (Aug)

0.4 vs 0.6 f’cast/prev

Market Movement Recap

09:56 AM Stronger overnight with some additional gains after ADP data.  MBS up 6 ticks (.19) and 10yr down 4.8 bps at 4.091

11:39 AM MBS up 3 ticks (.09) but down an eighth from AM highs.  10yr down 1.5bps at 4.125 but up 4bps from AM lows.

04:18 PM Off the weakest levels. MBS up an eighth and 10yr down 2bps at 4.119

We’ve seen a clumsy, confused return of various economic reports this morning (several reports were no previously announced with rescheduled release dates). Thankfully, the surprise releases were not big-ticket items. The most relevant report of the morning was ADP’s new weekly job count (“NER Pulse”) which showed another decline. By the time it came out, bonds had already rallied nicely in the overnight session. This suggests traders were already keen to buy the dip in prices that resulted in yields hitting the top of the recent range. The Cleveland Fed WARN notices (which came out late yesterday) could have helped get the party started.

Supposedly commercial air travel is back to normal, good for anyone coming in for the Mortgage Bankers Association of St. Louis event tomorrow and Thursday’s Mortgage Bankers Association of Kansas City annual luncheon. Speaking of Missouri, the Pony Express ran between St. Joseph and Sacramento for 18 months in 1860–1861, put out of business by the telegraph. (I had an ancestor, Frank “Deafy” Derrick, who rode for the Pony Express.) The telegraph was a great example of “better, faster, cheaper” winning out. Non-Agency investors, such as non-QM, DSCR, HELOC, and 2nd investors have certainly gained market share at the expense of the Agencies, namely Freddie Mac and Fannie Mae, perhaps for the same reason. The FHFA, Fannie, and Freddie have been distracted with Director Pulte sending out information on mortgage portability, 50-year mortgage amortization, tech companies doing business deals (with the GSEs with possibly an ownership stake in their companies), assumability, while Fannie Mae allegedly shared pricing information with Freddie Mac. (Today’s podcast can be found here and this week’s are sponsored by Figure. Figure is shaking up the lending world with their five-day HELOC, offering borrower approvals in as little as five minutes and funding in five days. And, embedding their technology is easy. Hear an interview with ICE’s John Hedlund on how mortgage leaders can scale sustainably, unlock new innovation in risk and operations, balance efficiency with human-centered borrower experience, and prepare for the next major shift in the housing and lending cycle.)

Representatives of the insurance industry called the proposal too speculative and prescriptive, while consumer and environmental advocates say it doesn’t go far enough.