Morning Report: Strange things happening in the financial markets

Vital Statistics:

	Last	Change	Percent
S&P Futures	2062.0	-7.0	-0.34%
Eurostoxx Index	3409.0	-39.4	-1.14%
Oil (WTI)	42.2	-0.7	-1.70%
LIBOR	0.356	0.001	0.14%
US Dollar Index (DXY)	99.05	0.039	0.04%
10 Year Govt Bond Yield	2.33%	0.00%
Current Coupon Ginnie Mae TBA	103.9
Current Coupon Fannie Mae TBA	102.9
BankRate 30 Year Fixed Rate Mortgage	3.86

Stocks are lower this morning as comments from Mario Draghi fail to inspire markets overseas and commodity prices cannot get out of their own way. Bonds and MBS are flat. 

Job openings increased to 5.5 million in the US last month. 

Macy's cut its profit outlook, which is an ominous sign for the holiday shopping season. Note we get retail sales tomorrow.

The Bloomberg Consumer Comfort Index rose from 41.1 to 41.6 last week. Sentiment regarding the economy and people's personal finances were unchanged, but the perception of the buying climate improved. I am sure low gas prices are having an effect here. 

Initial Jobless Claims were flat at 276k last week. They are at a 5 week high, but are still below 300k and are sitting at lows we haven't seen since the 1970s. 

Mortgage Applications fell 1.3% last week as purchases rose 0.1% and refis fell 2.2%. 

Five head scratchers in the market which are caused by regulation and central bank distortions. People are demanding higher rates from the government than they are demanding from other banks. Theoretically this should be impossible, however capital requirements have made it happen. There are other strange pricing / volatility events happening, which is why the Fed is anxious to get off the zero bound, even though inflation remains well controlled and the economy remains tepid. 

Completed foreclosures increased to 55k in September as the judicial states continue to work through their foreclosure inventory. The national foreclosure inventory stands at 470,000 homes, which amounts to about 1.2% of all homes with a mortgage. This is down 24% YOY. Here is what is behind the spike in REO. Part of it is seasonal - many states have foreclosure moratoriums around the holiday season. 

Sentiment for home purchases declined slightly in September, according to the Fannie Mae Housing Survey. Overall, sentiment about the real estate market is slowly improving, but it has been a tough slog.