Stock Indexes Rebound; Gold Futures Set New Record High

Will Mortgage Rates Fall—or Rise—Because of the Government Shutdown?

12 minutes ago

The U.S. government shutdown could impact the cost of mortgages, especially if the Republicans’ and Democrats’ inability to agree on a new spending bill drags on. These standoffs make it harder to tell how the economy is doing, and consequently complicate the tricky task of predicting rates even more.

Mortgage rates are most heavily influenced by yields on 10-year Treasury notes. Lenders, who often bundle mortgages together and sell them to investors, price their mortgage-backed securities (MBS) based on the returns offered by competing government bonds. That generally means cheaper mortgages during shutdowns, as in these moments of uncertainty, 10-year treasury notes are in high demand. Their prices rise and their yields fall.

Shutdowns can also pull rates lower by weighing on demand for mortgages. That’s because they result in hundreds of thousands of federal employees not getting paid and delayed issuing of government-funded mortgages, such as FHA, USDA, and VA loans, as well as federally financed flood insurance, which is mandatory in some areas.

This doesn’t, however, mean it’s a given that mortgage rates will slide during a government shutdown.

There are competing forces at play. For example, rates could be pushed higher by credit and fiscal worries and uncertainty about the direction of the economy. If government agencies aren’t operational, they can’t release their scheduled reports about such topics as the labor market and inflation, which often have a major bearing on the economy, borrowing costs, and investor behavior.

Read the full article here.

–Daniel Liberto

Jefferies Stock Falls on Unit’s Exposure to Bankrupt First Brands

31 minutes ago

Shares of Jefferies Financial Group (JEF) fell about 3% soon after markets opened after it disclosed that its Point Bonita Capital asset-management unit is owed $715 million from companies that bought parts from bankrupt auto-parts supplier First Brands.

“The Point Bonita portfolio has approximately $715 million invested in receivables that are almost entirely due from Walmart, Autozone, NAPA, O’Reilly Auto Parts, and Advanced Auto Parts, with First Brands, as the servicer, responsible for directing the Obligors’ payments to Point Bonita,” Jefferies said.

Jefferies shares are down about 27% this year.

Amazon Launches Prescription Vending Kiosks at Certain One Medical Clinics

2 hr 12 min ago

Amazon (AMZN) stock advanced nearly 1% before the bell after it said it was launching prescription vending kiosks at some Los Angeles-area One Medical clinics.

The company said that Amazon Pharmacy Kiosks will allow “patients to pick up prescriptions within minutes of their medical appointment,” and the service will debut in December.

“We know that when patients have to make a separate stop after seeing their doctor, many prescriptions never get filled,” said Hannah McClellan, Vice President of Operations, Amazon Pharmacy. “By bringing the pharmacy directly to the point of care, we’re removing a critical barrier and helping patients start their treatment when it matters most—right away.”

Amazon shares entered Wednesday up just 1% this year, while the benchmark S&P 500 has risen 14%.

Stock Futures Point Higher After Indexes Fell Tuesday

3 hr 18 min ago

Futures tied to the Dow Jones Industrial Average rose 0.2%.

S&P 500 futures also were up 0.2%.  

Nasdaq 100 futures also were 0.2% higher.