Morning Report - 2Q GDP revised upward

Vital Statistics:

	Last	Change	Percent
S&P Futures	1988.7	-8.4	-0.42%
Eurostoxx Index	3164.7	-29.8	-0.93%
Oil (WTI)	94.58	0.7	0.75%
LIBOR	0.238	0.000	-0.13%
US Dollar Index (DXY)	82.51	0.086	0.10%
10 Year Govt Bond Yield	2.33%	-0.03%
Current Coupon Ginnie Mae TBA	106.6	0.1
Current Coupon Fannie Mae TBA	105.9	0.1
BankRate 30 Year Fixed Rate Mortgage	4.08

Markets are lower this morning on tensions in Ukraine. Bonds and rallying as well. 

Some strong economic data this morning, with the second revision to 2Q GDP coming in at 4.2%. Consumption rose to 2.5% and the PCE price index (the Fed's preferred inflation indicator) came in at 2.1%, with the core at the Fed's target rate of 2%. 

Initial jobless Claims came in at 298,000, another strong number. The Bloomberg Consumer Comfort Index rose to a 5 week high. 

Pending Home Sales rose 3.3% in July, but are down 2.7% year-over-year.

The Ellie Mae Origination Insight Report is out. Refis dropped to 32% of all loans in July. FHA accounted for 20%, Conventional 64%, VA 11% and other 5%. The average FICO dropped to 727.

Fannie Mae has taken down their estimate for housing in 2015. They dropped their estimates for housing starts and new home sales by 17%. People hoping that 2015 is the breakout year in housing are going to be disappointed.

New rules on PMI could raise rates on average 15 basis points. 

The elderly are finding the amount they owe on their mortgages increasing. Not sure how much of this is due to reverse mortgages. The mortgage-burning party seems to be a thing of the past.

Consumers have confidence, but not the cash to do anything about it. This is why the consumer confidence numbers look good, but spending numbers are not. Asset prices can only do so much - the chief driver of spending is wages, not asset prices. In fact, home equity extraction during the bubble years masked the overall weakness in wage growth.