Morning Report – Increasing employment / decreasing earnings?

Vital Statistics:

Last Change Percent
S&P Futures 1680.0 10.9 0.65%
Eurostoxx Index 2843.9 45.6 1.63%
Oil (WTI) 107.4 -2.1 -1.96%
LIBOR 0.256 0.000 0.00%
US Dollar Index (DXY) 81.91 0.119 0.15%
10 Year Govt Bond Yield 2.96% 0.05%
Current Coupon Ginnie Mae TBA 103.2 -0.3
Current Coupon Fannie Mae TBA 102.6 -0.1
RPX Composite Real Estate Index 200.7 -0.2
BankRate 30 Year Fixed Rate Mortgage 4.56
Markets are higher on the possibility of a peaceful resolution to the Syrian crisis. Overnight, Syria has accepted a Russian framework of surrendering chemical weapons to international authorities. This has sent oil down and stock index futures up. Bonds and MBS are weaker
The NFIB Small Business Optimism Index came in at 94, a touch weaker than expected. Interestingly, the plans to increase employment increased 7 percentage points to a net 16%, however, earnings trends fell 13 points to -35%. So profitability is falling, but companies plan to increase headcount anyway? Surprising result. This survey also shows that while things are going well for the big cap S&P 500 names with international exposure, small businesses are still struggling.
Speaking of stock indices and struggling, the Dow Jones Industrial Average is making some changes. Out: Hewlett-Packard, Alcoa, and Bank of America. In: Goldman, Nike, Visa.
Higher interest rates are beginning to dampen people’s expectations for future home price appreciation, according to the latest Fannie Mae Housing Survey. The expected home price appreciation for the next 12 months has fallen to 3.4% in August from 3.9% in May.
The National Association of Homebuilders Improving Markets Index reached a record high in September as a total of 291 metro areas now qualify as improving markets. Here is a map of the improving areas:

16 Responses

  1. Hey Brent, watch ya think, does this support a housing bubble?

    http://www.cnbc.com/id/101019905

    Thanks!

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  2. We aren’t in another housing bubble. Bubbles require a mentality that an asset class is “special” and can never decline in price. We all know now that it can.

    We may never see another real estate bubble, but our grandkids might…

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  3. OT: AARP lauching a campaign to encourage mothers to “nudge” their kids to enroll in an insurance plan.

    http://www.aarp.org/health/affordable-care-act/mommeansit/?intcmp=EDO-RDRCT-MOMMEANSIT-20130909

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  4. Fair enough with the self-awareness aspect. But I’ll counter with the belief among stakeholders that they’ll always be a government bailout resulting in never losing one’s equity. Maybe the rate of return might occasionally drop but the principle is always insured.

    Bubble reinflated?

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  5. Note that you can go to jail now for posting a link so watch what you link to:

    “In a chat room for Project PM, Mr. Brown posted a link to it.

    Among the millions of Stratfor files were data containing credit cards and security codes, part of the vast trove of internal company documents. The credit card data was of no interest or use to Mr. Brown, but it was of great interest to the government. In December 2012 he was charged with 12 counts related to identity theft. Over all he faces 17 charges — including three related to the purported threat of the F.B.I. officer and two obstruction of justice counts — that carry a possible sentence of 105 years, and he awaits trial in a jail in Mansfield, Tex.

    According to one of the indictments, by linking to the files, Mr. Brown “provided access to data stolen from company Stratfor Global Intelligence to include in excess of 5,000 credit card account numbers, the card holders’ identification information, and the authentication features for the credit cards.”

    Because Mr. Brown has been closely aligned with Anonymous and various other online groups, some of whom view sowing mayhem as very much a part of their work, his version of journalism is tougher to pin down and, sometimes, tougher to defend.

    But keep in mind that no one has accused Mr. Brown of playing a role in the actual stealing of the data, only of posting a link to the trove of documents. ”

    http://www.nytimes.com/2013/09/09/business/media/a-journalist-agitator-facing-prison-over-a-link.html?ref=business&pagewanted=all&_r=0

    http://www.esquire.com/blogs/politics/journalist-agitator-faces-prison-091013

    Edit: This is truly nuts:

    “In the news release announcing the indictment, the United States attorney’s office explained, “By transferring and posting the hyperlink, Brown caused the data to be made available to other persons online, without the knowledge and authorization of Stratfor and the card holders.” “

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  6. Who thinks the Russian option will actually have a detrimental effect on Assad’s ability to wage chemical warfare?

    In case your curious, I do not. But, so what.

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  7. “Fair enough with the self-awareness aspect. But I’ll counter with the belief among stakeholders that they’ll always be a government bailout resulting in never losing one’s equity. Maybe the rate of return might occasionally drop but the principle is always insured.
    Bubble reinflated?”

    No, because the lenders won’t play along…

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  8. The memory of the most recent hunts for villains and scapegoats in the mortgage meltdown is too recent.

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  9. As we get closer to the debt ceiling showdown, the framing is shifting:

    http://www.washingtonpost.com/blogs/post-partisan/wp/2013/09/10/on-the-road-to-default/

    Now we see the actual numbers and what the tradeoffs are. To my mind, this benefits the Republican position in the run up argument that it really is a fight over spending.

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  10. I don’t get your point on the debt ceiling showdown jnc. Isn’t it always about spending? That’s what a budget is for…………..allocating money to pay the bills.

    Considering R’s won the sequester fight I doubt there’s much appetite for more spending cuts do you? Unless we want to unleash another grand bargain repeat performance which has virtually no chance of passing now, I don’t see the point in holding up the payment of bills due. I think that harms Republicans right now.

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  11. He’s being punked like a prison bi…, er, wife.

    @philipaklein: RT @AFP: BREAKING: Chemical weapons checks in Syria can go ahead if US renounces use of force: Putin

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  12. “lmsinca, on September 10, 2013 at 11:41 am said:

    I don’t get your point on the debt ceiling showdown jnc. Isn’t it always about spending? That’s what a budget is for…………..allocating money to pay the bills. ”

    No, Democrats have been desperately trying to frame this as a debt default, not a budget fight over spending priorities. Hence the arguments about not negotiating over the debt ceiling.

    I.e. all the blather about terrorism, hostage taking, and ransoms.

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  13. “Considering R’s won the sequester fight I doubt there’s much appetite for more spending cuts do you? ”

    I agree. And this is borne out by the new R proposal per Greg Sargent for a clean CR at FY2013 levels. Some of us predicted that months ago.

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  14. Whew!

    Heitkamp: ‘We’re Not Trusting Assad, We’re Trusting the Russians’ on Syria

    http://freebeacon.com/heitkamp-were-not-trusting-assad-were-trusting-the-russians-on-syria/

    Because Putin is nothing if not honest.

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  15. Tweet of the Day!

    @BenK84: Putin doesn’t take a dump on Obama’s chest without a plan.

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  16. Good sign for the effort to recall the CO gun grabbers?

    @amyewalter: CO Recall: Turn-out model in Co. Springs district shows R’s w/ “super voter” advantage. http://t.co/TzFFy8I7A7

    Like

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