| Last | Change | Percent | |
| S&P Futures | 1856.0 | 3.2 | 0.17% |
| Eurostoxx Index | 3149.1 | 9.9 | 0.31% |
| Oil (WTI) | 103.9 | 0.2 | 0.16% |
| LIBOR | 0.226 | -0.002 | -0.88% |
| US Dollar Index (DXY) | 79.7 | -0.104 | -0.13% |
| 10 Year Govt Bond Yield | 2.66% | 0.03% | |
| Current Coupon Ginnie Mae TBA | 105.7 | -0.2 | |
| Current Coupon Fannie Mae TBA | 104.3 | -0.1 | |
| RPX Composite Real Estate Index | 200.7 | -0.2 | |
| BankRate 30 Year Fixed Rate Mortgage | 4.41 |
Markets are higher this morning as earnings continue to come in and for the most part the look good. GE and Goldman reported better than expected earnings this morning, although Google disappointed last night. So far (and it is very early) it looks like the market's fears of a bad earnings season look unfounded. I think the biggest worry was going to be the banks, and so far, so good.
Markets will be closed tomorrow, and bonds close early today.
Initial Jobless Claims came in at 304k, which is a strong number historically. What is "normalcy" in initial jobless claims? Going back to 1970, it is about 375k. Here is a chart of initial jobless claims going back to 1970, so you can get some historical perspective:
The Fed released the Beige Book yesterday. Overall, it shows activity increasing since last month, which isn't surprising - the big question is whether it is a rebound from weather-related weakness or something sustainable. Certainly some of the manufacturing data we saw recently (industrial production, capacity utilization) seems to imply the latter. I think people don't appreciate the industrial production reports that came out yesterday - the headline numbers for March were great on their own, but the upward revisions to February numbers were huge.
On the labor front, wage pressures remained contained, except for the Dallas district. Most districts are reporting labor shortages in skilled labor. On the negative side, food prices are rising, and rising food prices plus stagnant wages can be an economic damper. The main takeaway is that the economy seems to be accelerating and it is looking like it is more than just a rebound from weather-related weakness. That said, the weakness in housing starts continues to be a head-scratcher. We are still at levels that represent the bottoms of previous recessions. Any excesses of the bubble were corrected long ago.
I suspect that a sudden increase in household formation is going to catch the builders absolutely flat-footed. Once the job market improves for young college grads, there is going to be a stampede for starter homes.
Yet one more data point that things are improving: banks are increasing their business lending. The big banks reported an 8.3% increase in commercial loans outstanding compared to a year ago. This is part of the reason why the bank earnings are not as bad as feared - business lending is replacing lost mortgage banking income. This portends an expansion in capacity, and almost by definition, hiring.
Recovery summer may finally come this year. Kind of messes with the whole "sell in May and go away" theory, doesn't it?
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