| Last | Change | Percent | |
| S&P Futures | 1494.0 | -1.3 | -0.09% |
| Eurostoxx Index | 2710.9 | -21.2 | -0.78% |
| Oil (WTI) | 97.69 | -0.2 | -0.26% |
| LIBOR | 0.298 | -0.001 | -0.17% |
| US Dollar Index (DXY) | 79.31 | 0.026 | 0.03% |
| 10 Year Govt Bond Yield | 1.97% | -0.02% | |
| RPX Composite Real Estate Index | 193.3 | 0.2 |
Markets are down small as the earnings reports continue to stream in. Economic bellwether UPS missed analyst estimates. Initial Jobless Claims came in at 368k. Incomes and spending rose. Bonds and MBS are continuing to rally after the FOMC statement yesterday.
The FOMC statement broke little new ground with the exception that they may have walked back their plan to end QE this year. Recall from the minutes of the Dec meeting, the consensus seemed to be that purchases of Treasuries and MBS would end sometime in 2013, probably towards the end of the year. That was unexpected and caused a sell-off in bonds. Yesterday, they said that if the outlook for the labor market does not improve substantially, they will continue to purchase Treasury and agency MBS. That caused a rally in bonds yesterday. Aside from that, the minutes contained nothing new.
As the sequestration approaches, defense contractors are relatively sanguine. Typical corporate optimism or do they know something the rest of us don't? Regarding the sequestration the latest amount for spending reduction is $85 billion. The requested increase in spending from 2012 to 2013 is $74 billion. So we are really talking about flat YOY spending (it really is a drop of $9 billion in the context of a $15.8 trillion economy). The most likely outcome is that the sequester happens and no one notices.
Another underwater refi program is in the works, which would allow underwater borrowers in private label securitizations to refi into a government loan. Another pilot program would have Treasury buy mortgages out of private label pools and mod the rates. A backup plan would have Treasury cut the rates and pass on the difference between the old and new rate to the investor for 5 years. If Washington comes up with a robust plan, the refi boom (which was thought to be over) could still have some legs.
Opposition to Obamacare is coming from an unlikely source: unions.
No comments:
Post a Comment