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[ad_1] Japan's factory activity shrinks for first time nearly 2 years -PMI [ad_2] Source link

[ad_1] Relief from the rate-driven volume reduction afflicting both the primary and secondary mortgage markets is expected to be elusive for some time to come, at least in terms of any renewed refinancing boost. That’s according to David Petrosinelli, a New York-based senior trader with InsphereX, a tech-driven underwriter and distributor of securities that operates multiple trading desks around the country. “We’re going to have a Fed-induced consumer slowdown,” Petrosinelli said. “We’re going to have a housing correction.” That correction, well underway, has already taken a hammer to the performance of the private-label and agency mortgage-backed securities (MBS) markets, which are tied closely to lenders’ success in growing mortgage originations. The Federal Reserve’s rate-hiking campaign to combat inflation has greatly chilled originations in the primary mortgage market, with some lenders’ origination volume down as much as 75% year over year. Consequently, the collateral available to support securitizations in both the agency and nonagency secondary markets has also fallen. We’ll have a lag in when people refi because even if there is a rate incentive to do it, there may not be the price incentive to do it. David Petrosinelli managing director at InsphereX Petrosinelli said that even if the Fed takes its foot off the accelerator on the rate front sometime during the first quarter of next year, as some market experts predict could happen in the best-case scenario, there will still be a lag effect before conditions improve for the housing industry.  “The Fed on average … over the last two decades, usually cuts rates about four or five months after the Fed funds rate has peaked,” he said. “The Fed could begin cutting rates by June [of next year], in the summertime, by that metric. “But it’s not just rates, because property values will probably also have continued to drift lower, so ultimately, if you want to refi, I don’t imagine that it would be very easy to do that if you’re off 5% to 10% in prices. We’ll have a lag in when people refi because even if there is a rate incentive to do it, there may not be the price incentive to do it.” HousingWire spoke to a half-dozen industry pros in the primary and secondary markets for their takes on when normalcy might return. Dour outlook A recent report on the private-label residential mortgage-backed securities (RMBS) sector by the Kroll Bond Rating Agency (KBRA) reveals that a dour outlook for the mortgage-origination market also reverberates in the secondary market. “Unsurprisingly, 30-year mortgage rates are near 7%, up almost 5 points this year, a level virtually unfathomable during the past decade,” the KBRA report states. “The magnitude and speed of this change has contributed to an unfavorable spread environment that has continued to negatively affect issuance across all sectors of RMBS in [the second half of] 2022.” KBRA defines RMBS as all nonagency prime, nonprime (including non-QM) and credit-risk transfer issuance. We project Q4 2022 to be the lowest RMBS securitization issuance volume in any quarter since 2016, closing at less than $6 billion. Analysts at Kroll Bond Rating Agency “KBRA now expects full-year 2022 RMBS issuance to top out under $102 billion,” the report continues, “down from a heady $122 billion [in 2021]. Such an outcome would equal an almost 17% decline relative to 2021 volume.”  On the bright side, KBRA also notes that 2022 will still be the second highest RMBS issuance year since the global finance crisis some 15 years ago and nearly double the $55 billion issuance mark in 2020. Still, much of that good news for 2022 is front loaded. “In terms of quarterly issuance, it tapered quickly in Q3 2022 and did not reach our projected issuance expectations of $20 billion, instead closing at almost $17 billion,” the report states. “Similarly, we project Q4 2022 to be the lowest RMBS securitization issuance volume in any quarter since 2016, closing at less than $6 billion.” For 2023, KBRA expects the mortgage interest-rate environment to remain elevated “as will other sector headwinds, including home-price declines, high inflation and potential volatility owing to changing economic conditions and geopolitics.”  Those factors will contribute to a 40% decline in RMBS volume in 2023, down to $61 billion, according to KBRA’s projections. The outlook for agency MBS issuance — securities issued by government-sponsored enterprises such as Fannie Mae or Freddie Mac — is equally grim, according to Robbie Chrisman, head of content at Mortgage Capital Trading (MCT). “Gross issuance of all agency mortgage bonds has declined for eight straight months to now sit at its lowest level since April 2019, below $100 billion a month and about one-third of what we were experiencing at this point last year,” Chrisman wrote in a November market-outlook report. “That trend likely won’t change going into the new year, as December, especially its latter half, sports the lowest average daily trade volume for any period of the year.” Agency mortgage-bond gross issuance, Chrisman notes, is projected to end 2022 at around $1.8 trillion, compared with the $3.3 trillion average posted during the boom years of 2020 and 2021. The drop-off in agency and nonagency MBS issuance makes sense when you consider the most recent origination forecast by the Mortgage Bankers Association, which shows overall loan production declining from $4.43 trillion in 2022, to $2.24 trillion for this year and $1.97 for 2023. The bulk of that decline is on the highly rate-sensitive refinancing side. MBS challenges From the point of view of investors and broker-dealers, Petrosinelli said, the current MBS market is not all that attractive, given the volatile rate environment.  “I remember the first few bonds I bought [decades ago],” he recalled. “My boss kind of looked at me and scratched his head. I said, ‘Look at the yield on this bond.’ And he said, ‘Well, the coupon is 200 basis points below Fed funds.’” If the bond’s coupon rate is lower than prevailing interest rates, then the bond’s price is discounted. That can be a problem for the holder of the bond in a rising rate

[ad_1] Money-wise, it’s been a challenging year for Canadians but the new year is also a chance to build better strategies around how you spend money. Steer clear of these three common pitfalls for financial success in 2023. Money mistake #1: Not paying off debt quickly If you’re in the red, you’re not alone. In 2022, Canada’s mortgage load experienced the biggest year-to-year jump in more than a decade, and everyone is feeling the pinch as inflation raises the price of everything from groceries to holiday gifts. Budgets are tight, which makes paying off bills trickier. Not all debt is created equal. Some debts, like a low-interest line of credit or a student loan with an interest-free grace period, might not be as pressing as those with higher interest rates. Overall, though, debt reduction is always a good strategy. That’s because, of course, over time the interest owing on a loan will really add up. In fact, an estimated 41% of Canadians carry a growing credit card balance every month. (Having a credit card that pays you back is key; read on for advice on finding the right one for your family.) Start off the new year with a clean slate—or, at least, a strategy to get you in the black as soon as possible. Not sure where to start? There are three main methods for tackling debt. You could try the snowball strategy, where you pay off the smallest line of credit or credit card balance first, rolling payment amounts together for bigger impact as your debts are eliminated. Another option is the avalanche method, where you focus on wiping out the debt with the largest interest rate first, then snowball that payment onto the next-largest debt, until everything is paid off. Or, if you have a low-interest line of credit tied to your home equity, for example, you could consolidate several small debts into one easy-to-track payment. Money mistake #2: Using the wrong credit card  Paying with plastic comes with some perks. In addition to being super-convenient, purchasing groceries and covering household bills with a credit card can also help you bump up your credit score. According to Equifax—one of the two credit bureaus that track Canadians’ credit histories—having two or three active credit cards, in addition to other types of credit, like a line of credit, looks good on a credit report. And a good card will pay you back in rewards that ultimately save you cash. In short, using the right card is a win-win. When comparing credit cards, consider the account terms, including the interest rate and the rewards, to choose one that meets your family’s specific needs. If, for example, you aren’t avid jetsetters, a travel rewards card might not be worthwhile. Photo by Karolina Grabowska from Pexels The Walmart Rewards Mastercard and Walmart Rewards World Mastercard have no annual fees, and they pay you back for purchases at Walmart stores, gas stations and just about everywhere else. If you’re more of an online shopper, the Walmart Rewards World Mastercard lets you earn 3% in Walmart Reward Dollars at Walmart.ca. You can watch your Walmart Reward Dollars add up, then put them toward all kinds of free stuff, from cleaning supplies to new snowsuits for the kids, or anything in between. Money mistake #3: Not talking about money Despite how more relaxed we are than generations ago, it’s still generally considered taboo to talk about your income, your investment portfolio or your retirement savings plan. Most people shy away from financial discussions with colleagues and friends. For those who grew up in a household with a no-money-talk mantra, it can be particularly difficult to have open and meaningful conversations about finances, even with a partner. Not sure where to start? Begin by introducing simple exchanges about household spending into dinnertime conversation—even with the kids. Let them hear about, and get involved in, discussions around saving up for a family trip, for example. Similarly, it can be helpful to have conversations with your partner about things like registered retirement savings plan (RRSP) contributions, for example, in a more frequent and casual way, instead of saving it all up for one big, serious talk. The key to better financial communication for most people is to make money a regular, casual topic. And, if your family needs assistance with financial planning or solving a money issue, consider talking to a professional, like a financial advisor, for helpful advice. Get free MoneySense tips and more in your inbox! It pays to know. Go to Site Read more about budgeting: Back to basics: Finding balance in your budget Budgeting for a less stressful holiday season How to set financial goals that are realistic and achievable How to manage money as a student The post New year, new spending habits appeared first on MoneySense. [ad_2] Source link

[ad_1] Christine McVie, of Fleetwood Mac, Is Dead at 79  The New York Times Christine McVie, Keyboardist and Singer for Fleetwood Mac, Dead at 79  Rolling Stone Fleetwood Mac singer Christine McVie dead at the age of 79  Fox News Christine McVie of Fleetwood Mac dead at 79  CNN Christine McVie, Fleetwood Mac singer-songwriter, dies aged 79  BBC View Full Coverage on Google News [ad_2]

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[ad_1] ASOS Plc. PT Lowered to GBP6.50 at UBS [ad_2] Source link

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[ad_1] Marketmind: How to be hawkish by J.Powell [ad_2] Source link

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[ad_1] China's factory activity contraction deepens in November [ad_2] Source link