Morning Report: Home prices within 1% of peak according to Black Knight

Vital Statistics:

	Last	Change
S&P Futures	2206.0	-58.0
Eurostoxx Index	340.9	-1.6
Oil (WTI)	47.0	0.9
US dollar index	91.7	-0.1
10 Year Govt Bond Yield	2.33%
Current Coupon Fannie Mae TBA	103
Current Coupon Ginnie Mae TBA	104
30 Year Fixed Rate Mortgage	4.14

Investors return to the markets after the Thanksgiving holiday contemplating a re-litigation of the 2016 Presidential election. Bonds and MBS are up. 

Green Party candidate Jill Stein is requesting a recount in PA, MI, and WI. Donald Trump took to Twitter to condemn the effort and alleged that "millions" of votes were fraudulent. The Clinton campaign is keeping its distance but will watch to make sure outside players aren't interfering with the process. If she manages to turn all 3 states, then she could win. One question that has come up has been whether Russia could have hacked the voting machines. That possibility looks unlikely. 

Since the election, bank stocks have increased their market caps by $300 billion. The bet is that a roll-back of regulation will increase profits. 

The highlight of the week will be the jobs report on Friday. The Street is looking for 170k jobs added, an unemployment rate of 4.9% and an increase in average hourly earnings of 0.2%. 

The FOMC minutes from the early November meeting were a non-event, and the FOMC is definitely setting the stage for a December hike: "Most participants expressed a view that it could well become appropriate to raise the target range for the federal funds rate relatively soon, so long as incoming data provided some further evidence of continued progress toward the Committee's objectives." In fact, a "few" participants wanted a hike at the November meeting. The December FOMC meeting is in two weeks. 

The FHFA raised the conforming limit from 417k to $424k. This was the first increase in 10 years. They also increased the high balance conforming limit to $636k. 

Home Prices rose 0.1% in September and are up 5.4% YOY. Home prices are now within a percent of their peaks from June 2006. 

Black Friday saw more shoppers, but less spending than in the past. About 154 million bought something in a store or online over the weekend, but they only spent about $289 as opposed to $300 a year ago. The National Retail Federation attributed the drop in spending to deep discounts offered by retailers. Black Friday online purchases were up 22% YOY.