Mortgages closed ~2.0-3.0/32nds wider to treasuries on Wednesday. Mortgages started the day strong into the larger than normal Fed operation before better investor selling and heavier origination pushed them wider into the close. Origination supply approached ~$11.0B on the day. The Fed purchase schedule includes ~6.7B in 15yr, 30yr, and GNMA securities. At 5:00pm, the FN 30 year 2.0% (Dec) was -4/32nds (103-14+) and the FN 15 year 1.5% (Dec) was -2+/32nds (102-08) from the prior close.

Treasuries were mixed on the day. At the close, the 2-year was unchanged (.175), and the 10-year was -3/32nds (.872).

Stocks dropped again on Wednesday as reports of virus cases increased and new restrictions were announced. Pfizer rallied as they seek authorization for their vaccine that was shown 95% effective. The Housing Starts number came in higher than expected to 1.530 million up from 1.415 million the month prior. The DJIA closed -344.93 to 29,438.42, while the S&P 500 was -41.74 to 3,567.79.

From Elliot Eisenberg, the Bowtie Economist: US retail sales rose just 0.3% in October, their slowest pace since spring. This suggest that, at minimum, consumers are becoming more cautious and possibly that the recovery is slowing as job growth softens, virus cases rise, and government assistance peters out. Moreover, debit and credit card spending are down 4% Y-o-Y and consumer confidence, as measured by four different surveys, has declined of late.