| Last | Change | Percent | |
| S&P Futures | 1365.9 | 1.9 | 0.14% |
| Eurostoxx Index | 2318.7 | -22.7 | -0.97% |
| Oil (WTI) | 102.8 | 0.1 | 0.06% |
| LIBOR | 0.467 | -0.002 | -0.43% |
| US Dollar Index (DXY) | 79.57 | -0.230 | -0.29% |
| 10 Year Govt Bond Yield | 2.02% | -0.02% | |
| RPX Composite Real Estate Index | 171 | 0.2 |
Equity markets are generally flat after early strength was given back on disappointing economic data. Bonds have reversed earlier declines and MBS are up as well.
The PPI showed that wholesale price inflation remains broadly in check, although the core numbers (ex-food and energy) were slightly higher than expected, running at 2.9%. Initial Jobless Claims were much higher than expected, 380k vs 355k. The trade deficit was lower than expected due to a drop in imports. Futures sold off on the numbers. Some of the other indicators (NAPM, ISM) have been coming in weak as well, signalling the economy might be headed for a slowdown.
The market may be picking up on the sheer amount of fiscal tightening that is scheduled to begin on Jan 1, as the Bush tax cuts expire and the budget cuts from the debt ceiling debates kick in. Of course, no one really wants this to happen, but it is an election year, and they will take effect if nothing happens to stop it. So the market is probably going to start handicapping this a little.
Bill Gross continues to cut Treasuries and buy MBS. This is basically a bet that the Fed will continue Operation Twist in a different way after it expires in June - by trying to influence mortgage rates directly by buying current coupon MBS and repoing short.
RealtyTrac released its US Foreclosure Market Report for Q1, noting that foreclosure activity was the lowest since Q407. Activity dropped in the non-judicial states and increased in the judicial ones. Foreclosure starts have been ticking up, and everyone expects a wave of foreclosures to hit the market as the shadow inventory gets liquidated.
Janet Yellen said that the Fed may have to maintain ultra-low interest rates even beyond 2014. Yellen is one of the more dovish members of the FOMC, and her statements stand in contrast to other members who are noting pricing pressures.
In earnings, Google and Nationstar report after the close. JP Morgan and Wells Fargo report Friday before the open.
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