Morning Report 8/16/12

Vital Statistics:

Last Change Percent
S&P Futures 1407.1 3.6 0.26%
Eurostoxx Index 2429.5 -0.9 -0.04%
Oil (WTI) 94.65 0.3 0.34%
LIBOR 0.434 -0.001 -0.23%
US Dollar Index (DXY) 82.72 0.077 0.09%
10 Year Govt Bond Yield 1.81% -0.01%
RPX Composite Real Estate Index 190.4 0.3

Stocks are ticking higher this morning in spite of earnings misses by Wal Mart and Sears and some disappointing housing data. Bonds are more or less flat, while MBS are up a tick or two.

Weekly Initial Jobless Claims came in at 366k, more or less in line with expectations and recent history. Housing starts were disappointing at 746k, but an upside surprise in building permits offset that. Housing starts are recovering, but we are still running at half our historical rate, and have averaged a couple hundred units below average over the last 10 years.

Looks like Corzine is going to skate..

The backup in yields over the last few weeks has been dramatic (a range of 50 basis points or so). How have mortgages fared?  Actually, MBS have held up better than long bonds over the past month or so.  Since they underperformed on the the way up, they are outperforming on the way down.  Here is a chart of both securities indexed over the past month:  Note: These are NOT bond prices, they are indices.

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