| Last | Change | Percent | |
| S&P Futures | 2023.2 | -4.2 | -0.21% |
| Eurostoxx Index | 3253.8 | -18.3 | -0.56% |
| Oil (WTI) | 46.2 | 0.3 | 0.68% |
| LIBOR | 0.317 | 0.002 | 0.63% |
| US Dollar Index (DXY) | 94.73 | -0.201 | -0.21% |
| 10 Year Govt Bond Yield | 2.07% | 0.04% | |
| Current Coupon Ginnie Mae TBA | 104.8 | ||
| Current Coupon Fannie Mae TBA | 104.4 | ||
| BankRate 30 Year Fixed Rate Mortgage | 3.8 |
Stocks are lower this morning after IBM missed earnings. Bonds and MBS are down.
Housing starts rose 1.2 million in September, beating the 1.1 million estimate. These are up 4.7% from a year ago. Building Permits disappointed however, coming in at 1.1 million vs. the 1.2 million estimate. Starts saw an increase in single fam and multi-fam, however permits saw a drop in multi-fam.
Goldman is calling the rally in Treasuries overdone. Their argument is that investors are underestimating the potential for inflation. Not seeing where inflationary pressures are going to come from, with a strong dollar, very little wage growth, and capacity utilization at 77%. The current probability of a Dec rate hike is 33%.
Speaking of wage growth, Wal Mart was hammered last week after announcing that wage increases would cause earnings to drop next year. This will be interesting to watch - do other retailers follow suit or do they maintain lower wages? Some early hints that it will be the former. Turnover for retailers has increased to 65% from 50% and open retail positions are up 31% this year.
The Obama administration rejected calls to re-privatize Fannie and Fred, leaving GSE reform for the next president. The government is making a lot of cash from F&F. Both private investors (especially activist funds who hold Fannie prefs and common) and affordable housing advocates are pushing the government to clarify where F&F stand.
Apparently Joe Biden's decision of a presidential run will be released any day now.
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