Morning Report - A considerable time

Vital Statistics:

	Last	Change	Percent
S&P Futures	1848.1	-4.1	-0.22%
Eurostoxx Index	3053.4	-22.9	-0.75%
Oil (WTI)	99.67	-0.7	-0.70%
LIBOR	0.234	0.000	-0.11%
US Dollar Index (DXY)	80.26	0.268	0.34%
10 Year Govt Bond Yield	2.78%	0.01%
Current Coupon Ginnie Mae TBA	104.7	0.0
Current Coupon Fannie Mae TBA	103.6	-0.1
RPX Composite Real Estate Index	200.7	-0.2
BankRate 30 Year Fixed Rate Mortgage	4.36

Markets are lower after yesterday's FOMC meeting sent rates higher and stock lower. Initial Jobless Claims came in at 320k, lower than expected, but higher than last week. 

In other economic indicators, the Philly Fed Business outlook rebounded in March, and the index of leading economic indicators rose. Existing Home sales were virtually flat at 4.6 million units. The median home price rose to $189,000, a 9% increase year-over-year. The NAR notes that most of the price appreciation is at the higher price points - the lower price points (sub $250k) are actually falling. In fact, most of the price appreciation is in the $1 million + bucket.

Stocks and bonds sold off on the FOMC statement as investors re-calibrated their estimates as to when rates will begin to rise. The 10 year bond sold off about 6 basis points, but the real action was in the 2 year where rates jumped from 34.7 basis points to close at 42 basis points. In the press conference, Yellen threw out the (probably offhand) comment that "a considerable time" could mean "six months" and that was the catalyst for the bond market sell-off. You can read some of the parsing here. As expected, the Fed cut asset purchases by $10 billion a month. They also got rid of the 6.5% unemployment target and went to more qualitative guidance, as expected.

The Fed released their latest economic forecasts - unemployment and GDP were lowered, while inflation was increased. The forecast for when rates would rise shortened a bit, while the expected rate increased. We will have to wait for the minutes to get a better read on what is behind that. 

Homebuilder Lennar is up a couple of percent pre-open after reporting first quarter numbers that beat expectations. Orders increased 10% in units and 25% in dollar value. ASPs rose 18%. and gross margins increased 300 bps. This was the highest first quarter margin in the company's history. The company felt it was still a little too early to predict the strength of the spring selling season, but hopefully they will give some color on the 11:00 am EST conference call. The big question will be whether they can still push through price increases or have we reached the point where it is depressing traffic.