Morning Report - People think mortgage credit is getting tighter

Vital Statistics:

	Last	Change	Percent
S&P Futures	1870.4	-3.8	-0.20%
Eurostoxx Index	3176.4	16.7	0.53%
Oil (WTI)	100.2	-0.6	-0.61%
LIBOR	0.223	-0.001	-0.27%
US Dollar Index (DXY)	79.24	0.037	0.05%
10 Year Govt Bond Yield	2.60%	0.01%
Current Coupon Ginnie Mae TBA	106.3	0.0
Current Coupon Fannie Mae TBA	105.5	0.1
BankRate 30 Year Fixed Rate Mortgage	4.2

Markets are down small on no real news. Bonds and MBS are down as well.

Initial Jobless claims came in at 319k, a decent number.

Janet Yellen spoke yesterday, but nothing market-moving came out of it. The punch line is that ending asset purchases remains appropriate, but it is still too early to think about increasing interest rates. She declined to give any sort of timeframe as to when it might be appropriate to raise rates. The Fed is anticipating a rebound in Q2 after a dismal Q1. She mentioned that she saw "reaching for yield" in the high yield bond market (as if the Fed has nothing to do with that - see below). The Fed is also considering whether additional measures might be necessary to deal with the too-big-to-fail banks. 

So far earnings season has not been kind to the tech stocks. Erstwhile darlings like FireEye (FEYE) and Twitter (TWTR) have been demolished over the past few months. FireEye is down 71% since early March, and Twitter is down 43%. It has been a rough market for some of these darlings that disappoint. Vol traders have to be loving life. Momentum traders, not so much.

Chart: Twitter stock price

Fannie Mae's April Housing Survey is out, and there are a few interesting tidbits. The first one is that that people think it is harder to get a mortgage now than it was a few months ago. As anyone in the business can tell you, bankers are easing terms, not tightening them. In March, the 47% of respondents said it would be difficult to get a loan, vs. 52% who thought it would be easy. Now, it is 52% think it would be hard, vs. 45% who think it would be easy. That is a surprising result.

The second interesting tidbit is an increase in the number of people who think now is a good time to sell. The percentage of people who think it is a good time to buy are largely unchanged, but the potential sellers are increasing. This will hopefully portend an increase in purchase activity as we fix the low inventory problem.

Speaking of inventory, professional investors are marketing bonds issued against rental properties. Blackstone plans a $1 billion issue, after American Homes 4 Rent did a half a billion issue last month. I figured the pros would at some point become sellers, but I guess the opportunity cost of capital right now is exceptionally low. With home prices up 23% in some places they can't be looking at high single digit rental yields anymore.