| Last | Change | Percent | |
| S&P Futures | 1957.2 | 4.8 | 0.25% |
| Eurostoxx Index | 3245.5 | 17.2 | 0.53% |
| Oil (WTI) | 105.8 | 0.4 | 0.39% |
| LIBOR | 0.232 | 0.001 | 0.48% |
| US Dollar Index (DXY) | 79.81 | 0.030 | 0.04% |
| 10 Year Govt Bond Yield | 2.55% | 0.02% | |
| Current Coupon Ginnie Mae TBA | 106.6 | -0.2 | |
| Current Coupon Fannie Mae TBA | 105.8 | -0.2 | |
| BankRate 30 Year Fixed Rate Mortgage | 4.15 |
Stocks are modestly higher this morning on good Chinese manufacturing data. Bonds and MBS are down small.
The ISM Manufacturing Index came in at 55.3, a small drop from last month and slightly below consensus. Construction spending rose .1% in May, disappointing, but the April number was revised upward in a big way, from .2% to .8%.
Auto sales are coming in this morning and at first glance, they look pretty good. Chrysler sales are up 9% and even troubled GM's sales were up 1%. I think the average age of a car in the US is pushing 12 years, which is a record. This implies we are going to see a wave of auto buying as these cars become too expensive to keep fixing.
Financial repression has consequences. The Fed is rightfully worried about creating another credit bubble. One place to watch is commercial mortgages, where firms are refinancing old bubble-era debt at current rates. Spreads have narrowed 10 basis points this year to 77 basis points for the higher quality stuff, and LTVs have climbed to within 10% of their third quarter 2007 peak. Vacancy rates are still elevated, and are above the peak of the early 00's recession.
The Supreme Court split the baby on a couple big decisions yesterday, ruling that companies don't have to cover abortifacients if they object to them for religious reasons, and ruled that non-union members don't have to pay dues for unions that negotiate on their behalf. Both decisions were narrowly written, but that won't stop the avalanche of "slippery slope" columns that are being written this morning.
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