Morning Report: Big week for Washington

Vital Statistics:

	Last	Change
S&P Futures	2358.5	-0.8
Eurostoxx Index	381.4	0.3
Oil (WTI)	50.8	0.0
US dollar index	90.4
10 Year Govt Bond Yield	2.38%
Current Coupon Fannie Mae TBA	103.41
Current Coupon Ginnie Mae TBA	103.7
30 Year Fixed Rate Mortgage	4.13

Stocks are flattish on no real news. Bonds and MBS are flat as well.

The ISM Manufacturing Report ticked up slightly in March. New orders and production slipped while employment gained. Prices rose as well. The reading of 57.2 would correspond historically with about a 4.4% increase in real GDP.

Construction spending rose 0.8% MOM in February and is up 3.0% annualized. Residential construction rose 1.8% MOM and is up 6.3% YOY. 

We have a relatively news heavy week coming up with the FOMC minutes and the jobs report. We will also get the ISM data this week. 

This week will give will also be important politically. Republican Supreme Court nominee Neil Gorsuch will be voted on in the Senate. Minority leader Chuck Schumer has demanded a 60 vote threshold to confirm him (here is the current state of affairs there), and Mitch McConnell has said Gorsuch is getting confirmed one way or the other, which is a threat to change Senate rules on judicial nominations (the nuclear option). If the Democrats filibuster Gorsuch and McConnell changes the rules, it pretty much poisons the well for any sort of bipartisan legislation like health care reform, tax reform, or financial reform. This would be good for rates at the margin. 

Cash-out refinances are about 44% of all refis these days, which is a pickup from the depths of the bubble, but nowhere near the heady times of the bubble years where people used cash out refis to fund consumption. Today, cash-out refinances are used more to refinance debt, especially credit card debt. 

As a general rule, when stocks and bonds disagree, go with what bonds are telling you. Mohammed El-Arian breaks that rule to say the bond market has it wrong. His point is that the bond market is underestimating how assertive the Fed is becoming. 

Good article for the first time homebuyer.. All the stuff that can come up and surprise you. Bonus tip: Don't load up on credit for all the things you will need for your new house until after your loan closes.