| Last | Change | Percent | |
| S&P Futures | 2074.8 | -9.7 | -0.47% |
| Eurostoxx Index | 3398.1 | -23.0 | -0.67% |
| Oil (WTI) | 45.51 | -0.4 | -0.94% |
| LIBOR | 0.324 | 0.001 | 0.23% |
| US Dollar Index (DXY) | 97.49 | -0.297 | -0.30% |
| 10 Year Govt Bond Yield | 2.11% | 0.01% | |
| Current Coupon Ginnie Mae TBA | 104.6 | ||
| Current Coupon Fannie Mae TBA | 104.2 | ||
| BankRate 30 Year Fixed Rate Mortgage | 3.8 |
Markets are lower this morning after a lousy third quarter GDP pring. Bonds and MBS are down small.
The advance estimate of third quarter GDP came in at 1.5%, a big drop from the second quarter 3.9% reading. The standout was gross private investment which fell 5.6% after increasing 5% the quarter before. I suspect that is dollar / commodity price driven - exporters are facing slowing demand and capital expenditures are falling in the energy sector.
The core PCE index (the inflation measure preferred by the Fed) rose 1.2% in the third quarter, well below the Fed's 2% target rate.
Initial Jobless Claims rose slightly to 260,000 last week.
The Fed maintained interest rates yesterday, and made very few changes in the October statement. There was one dissent (Lacker) who wanted to raise the Fed Funds rate 25 basis points. In terms of language, the concern over overseas markets was removed. They noted the pace of job creation slowed somewhat, however they characterized business investment as solid. That is surprising given the big drop in business investment from the GDP print from this morning. Bonds sold off slightly on the statement, and stocks ended up reversing their losses and going out on their highs. The take seems to be slightly hawkish.
The unintended consequences of ZIRP continue as merger mania sweeps the country. The entire semiconductor industry is merging, and now Allergan is in talks with Pfizer. Interestingly many merger arbitrage hedge funds are shutting down as returns are paltry in the strategy.
The Republicans had another debate last night: The winners were Ted Cruz and Marco Rubio. The losers were Jeb Bush, CNBC, the mainstream media, and maybe John Kasich.
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