| Last | Change | Percent | |
| S&P Futures | 1370.0 | -8.2 | -0.59% |
| Eurostoxx Index | 2460.4 | -13.1 | -0.53% |
| Oil (WTI) | 84.97 | -0.6 | -0.70% |
| LIBOR | 0.31 | 0.000 | 0.00% |
| US Dollar Index (DXY) | 81.2 | 0.166 | 0.20% |
| 10 Year Govt Bond Yield | 1.59% | -0.01% | |
| RPX Composite Real Estate Index | 192.8 | 0.3 |
Markets are weaker this morning on Greek worries and a negative earnings report out of Weatherford. Bonds are up 1/2 a point and MBS are flat.
The NFIB Small Business Optimism index gained .3 points. Uncertainty reached a record high, although this is understandable given it was an October before an election. CAPEX remains in maintenance mode, and hiring is absolutely flat. Generally it was a glum report.
Now that we have the election behind us, we can pretty much safely say that it is safer to be more constructive on Treasuries. The Fed will continue to do what it does, and taxes are going up at the end of the year. Combine that with the fact that Obama's re-election is a negative for energy and the financials, and we could be facing a weak Q113 as well.
But is there a bright spot? Ah yes, housing. Jamie Dimon has some optimistic comments regarding housing in the WSJ. He basically cites the same things I have been talking about - household formation, affordability and inventory. He makes the statement that housing isn't going to recover in the absence of a strong economy, which I am not so sure I agree with. I think the low household formation numbers of the last 6 years are artificially depressed due to a lousy economy and have created pent-up demand. Eventually, people get married, move out of Mom and Dad's place, and boot out the roommates. In other words, housing can improve in spite of the economy.
Not only that, but think about this: As part of obamacare, obama instituted a 3.8% surtax on investment income for people making over $250k. In a tight rental market, landlords will undoubtedly attempt to pass that cost on to renters, making the rent vs buy decision even more of a no-brainer. Credit availability remains a problem, though as Dimon notes.
Wapo notes that the REO discount is starting to disappear.
AIG is looking to expand its balance sheet in the mortgage business.
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