| Last | Change | Percent | |
| S&P Futures | 1674.0 | 3.7 | 0.22% |
| Eurostoxx Index | 2680.7 | 5.8 | 0.22% |
| Oil (WTI) | 105 | -1.0 | -0.92% |
| LIBOR | 0.268 | 0.000 | 0.00% |
| US Dollar Index (DXY) | 83.4 | 0.416 | 0.50% |
| 10 Year Govt Bond Yield | 2.63% | 0.05% | |
| Current Coupon Ginnie Mae TBA | 101.6 | 0.1 | |
| Current Coupon Fannie Mae TBA | 99.95 | -0.4 | |
| RPX Composite Real Estate Index | 203 | -0.2 | |
| BankRate 30 Year Fixed Rate Mortgage | 4.48 |
Markets are higher on no real news. The NY Empire Manufacturing Survey came in higher than expected, while retail sales were weaker. Citi's 2Q numbers beat estimates. Bonds and MBS are flattish.
Lots of data this week, punctuated by the Bernank's testimony on Wed in front of the House Financial Services Committee. On Tues, we have the Consumer Price Index; now that QE4EVA is officially done with, inflation numbers are becoming relevant again. We will also get capacity utilization, industrial production, and homebuilder sentiment. Wednesday, we get housing starts and building permits, Thursday is Philly Fed, and Leading Economic Indicators.
Last week's rally in bonds was probably due to an overshoot on the jobs report after the 4th. We saw the average 30 year mortgage rate hit 4.64% on Friday, July 5 and the 10 year hit 2.74%. It looks like a lot of the Street took a 4 day weekend, so the market was illiquid and you had forced REIT selling in a thin market. While rates can certainly go higher, I would almost put an asterisk on those prices. I would be looking for a trading range in the 10 year of 2.45% - 2.65%.
While earnings season officially started last week, it begins in earnest tomorrow. Heavyweights like Coca Cola, Goldman, American Express, IBM, Intel, Microsoft, Google, and GE will report this week. With the stock market at record highs, it is vulnerable to earnings disappointments. I would expect any sell-off in stocks to be bond bullish, but with the backdrop of ending QE, the effect may be modest.
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