Morning Report: Small business and consumers are becoming more negative on the economy

Vital Statistics:

	Last	Change	Percent
S&P Futures	2039.8	5.3	0.26%
Eurostoxx Index	2928.2	4.0	0.14%
Oil (WTI)	40.74	0.4	0.94%
LIBOR	0.631	0.002	0.32%
US Dollar Index (DXY)	93.98	0.025	0.03%
10 Year Govt Bond Yield	1.76%	0.03%
Current Coupon Ginnie Mae TBA	105.8
Current Coupon Fannie Mae TBA	104.9
BankRate 30 Year Fixed Rate Mortgage	3.65

Markets are higher despite a lousy start to the earnings season. Bonds and MBS are down.

Earnings season kicked off last night with Alcoa missing on revenues and revising down their forecast for aluminum demand. As is on cue, the IMF took down their global growth forecast for 2016 from 3.4% to 3.2%. Fastenal also missed this morning. 

Import prices rose for the first time since June of last year. Energy prices increased and food prices decreased. On a year-over-year basis, import prices are down over 6.2%. We will get two more inflation indicators this week, with the Consumer Price Index and the Producer Price Index. 

The NFIB Small Business Optimism index fell again to a two year low. The bright spot? Businesses are still adding employees, although there is a mismatch between the skills they want and the available labor pool. A net 22% of employers reported increasing wages. Capital expenditures are rising slightly, although it is tough to tell if that is merely maintenance capex or growth capex. 

Consumers are getting more pessimistic about the economy as well, according to Gallup. Voters are mad as hell, and they aren't going to take it anymore. 

Completed foreclosures fell to 34k in February, according to Corelogic. This is a decline of 10% YOY. There are 434k homes in foreclosure, down 24% from a year ago. This is roughly where foreclosures were in late 2007. 1.25 million mortgages are seriously delinquent, which is down 20% from a year ago. Foreclosures remain an issue in the judicial states (especially in the Northeast) but aren't an issue anywhere else. We are seeing delinquencies creep up in the energy states. 

Another day, another settlement with the DOJ. Goldman settled with the DOJ for $5.1 billion.  I wonder how the fines stack up compared to the bailout money received.