Not so long after Treasury bond yields experienced an unprecedented drop, the average 30-year mortgage rate rose, reflecting volatility related to the coronavirus as well as capacity issues on multiple levels.
Career veterans call fallout from COVID-19 concerns on the municipal market worse than that of 9/11 and the 2008 financial crisis combined.
Companies in the mortgage business were already focused on processing a lot of loans and generating efficiencies before the latest uptick in business hit.
Michael Zezas, managing director of research at Morgan Stanley, notes that muni yields have not fallen as quickly as the Treasury equivalents and recession risk climbs the longer the coronavirus persists. Layer on top of those items the incipient oil competition and quite a storm is brewing. Even liquidity is becoming "disorderly." John Hallacy hosts.
“Find ways to generate income,” says one financial planner.
The central bank is trying to get ahead of possible funding disruptions caused by the coronavirus. Policymakers want to avert a repeat of September, when short-term borrowing costs spiked amid imbalances in supply and demand for cash.
The municipal market was hammered Wednesday by the COVID-19 pandemic with a more than quarter point correction in AAA benchmarks, issuers pulling deals off the shelves and more reports of pricing and evaluation confusion.
Federal government stimulus measures could be on the way, as volatility in the stock markets continue and coronavirus spreads. We check in with dealmakers from Riverside, Merrill Corp. and Paul Hastings about the potential impact on mid-market M&A. In PE news, Blackstone backs healthcare technology company HealthEdge.
There may only be so much institutions can do if the outbreak affects borrowers' ability to repay credit.
Mortgage companies that borrow heavily to keep their operations running may face financial pressure from coronavirus-related market volatility as it affects the valuations of collateral securing their financing.