Morning Report - Lots of housing data this week

Vital Statistics:

	Last	Change	Percent
S&P Futures	1841.7	8.8	0.48%
Eurostoxx Index	3027.9	23.3	0.77%
Oil (WTI)	98.14	-0.8	-0.76%
LIBOR	0.234	0.000	-0.17%
US Dollar Index (DXY)	79.45	0.000	0.00%
10 Year Govt Bond Yield	2.66%	0.01%
Current Coupon Ginnie Mae TBA	105.8	-0.1
Current Coupon Fannie Mae TBA	104.4	0.0
RPX Composite Real Estate Index	200.7	-0.2
BankRate 30 Year Fixed Rate Mortgage	4.28

Markets are higher this morning on no real news. Bonds and MBS are down on the risk-on trade.

We have lots of housing data this week, starting with the NAHB sentiment numbers later today, housing starts and building permits tomorrow, and existing home sales on Friday. We will also have earnings announcements from Lennar and KB Home. The big things I will be listening for in the earnings announcements will be (a) color on the traffic for the Spring Selling Season, and (b) how much of an increase in ASPs (average selling prices). I think we may be at the point where buyers are balking at higher prices and that means that builders will have to sell more units to move the needle on the top line. This means more sales, and stronger economic growth. A return to normalcy in home construction has been one of the last pieces of the puzzle in this economic recovery. 

95.5% of Crimeans want to join Russia, according to a vote. This referendum certainly ups the ante in the volatile Ukranian situation. The White House has insisted the referendum was illegal and would not be accepted. The EU is meeting today to discuss sanctions.

Some manufacturing economic data this morning:  Industrial Production rose .6%, much higher than expected. Manufacturing Production rose .8%, and capacity utilization ticked up to 78.8%. The New York Fed Empire State Manufacturing Survey showed manufacturing is improving, albeit slowly, in the New York State region. All good numbers - the Industrial Production numbers are subject to variations based on the weather and mining (think fracking), but the manufacturing number is strong too. Definitely positive data. 

Here is the draft of the bipartisan Senate Housing Finance Reform Bill. Fannie and Fred go away and the Federal Mortgage Insurance Corporation is established. Private capital will take the first 10% loss on MBS and then FMIC bears the rest. The HUD affordable housing goals go away, but we still will be in the social engineering business, except it will be lenders paying for it with a 10 basis point fee on all origination. Of course this will simply get passed on to borrowers. The FMIC will get to dole out the funds.