| Last | Change | Percent | |
| S&P Futures | 1391.8 | 2.8 | 0.20% |
| Eurostoxx Index | 2387.0 | 14.5 | 0.61% |
| Oil (WTI) | 91.27 | -0.1 | -0.14% |
| LIBOR | 0.439 | -0.001 | -0.11% |
| US Dollar Index (DXY) | 82.35 | -0.024 | -0.03% |
| 10 Year Govt Bond Yield | 1.55% | -0.02% | |
| RPX Composite Real Estate Index | 188.1 | 0.7 |
Markets are slightly higher this morning on a deal to rescue Knight Capital. There are very few economic releases this week, and Europe should be quiet as we get into August. Bonds are up half a point, while MBS are up a few ticks.
As some lenders exit the correspondent business, others enter. While Bank of America and GMAC are leaving or scaling back, Redwood Trust is applying for Fan and Fred approval in order to increase their focus from just jumbo loans. Redwood Trust is the main issuer of MBS without a government guarantee.
Knight Capital received a $400MM rescue from Getco LLC. Interestingly, the rescue was put together by Knight's customers who fear too much concentration in market makers. While the trading error that caused it will undoubtedly draw regulatory scrutiny to high-frequency trading. Maxine Waters is already looking to hold hearings on it. Wonder if they will look to the unintended consequences of Reg NMS, which basically destroyed the business model of traditional market-making. HFT is what is left. If investors don't want to pay commissions or bid / ask spreads, they will probably have to accept the volatility that goes along with computerized trading.
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